Whirlpool Corp. ( WHR ) is set to report fourth-quarter 2013 results on Jan 30. Last quarter, it posted a positive surprise of 3.0%. Let us see how things are developing for this announcement.
Growth Factors in the Past Quarter
Last quarter, the company reported outstanding bottom-line results driven by its sustained focus on cost reduction initiatives, along with better price and product mix. Moreover, we expect future results to depict more sustained growth of the company's brands resulting from new product development, implementation of aggressive cost cuts and global expansion of business.
Our proven model does not conclusively show that Whirlpool is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here as you will see below.
Positive Zacks ESP: ESP for Whirlpool is 0.67% since the Most Accurate Estimate stands at $3.02, which is above the Zacks Consensus Estimate of $3.00.
Zacks Rank #4 (Sell): Whirlpool's Zacks Rank #4 (Sell) has negative effect on the predictive power of ESP because the Zacks Rank #4 when combined with a 0.67% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that they have the right combination of elements, i.e. a positive Zacks Earnings ESP and a Zacks Rank #1, 2 or 3.
Michael Kors Holdings Ltd. ( KORS ) with an Earnings ESP of +1.15% and Zacks Rank #2 (Buy)
Under Armour, Inc. ( UA ) with an Earnings ESP of +3.77% and a Zacks Rank #3 (Hold)
Newell Rubbermaid inc. ( NWL ) with an Earnings ESP of +2.17% and a Zacks Rank #3 (Hold)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.