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Food Stocks to Watch for Q4 Earnings on Feb 15: KHC, USFD

The Q4 earnings season has picked up pace and investors seem to be happy as it is on track to record the best performance in the last eight quarters. At present, sectors including finance, technology, construction, industrial products, basic materials and consumer discretionary look promising and are delivering improved growth in the current quarter. However, the pace of growth is currently modest and positive earnings surprises are not clearly visible. Nevertheless, it is better than the historical levels.

The Q4 earnings season has so far seen quarterly releases from 71.9% of the consumer staples companies in the S&P 500 cohort. According to the latest Earnings Preview , 60.9% of the companies have surpassed earnings and 39.1% have beat revenue expectations. Total earnings at these consumer staples companies increased 9.4% on 2.8% growth in revenues. Total earnings for the sector are expected to increase 10.6% on the back of 4.1% revenue growth and 0.7% higher margins, which might prove profitable over the long haul.

Food/beverage stocks have posted mixed results this earnings season. Leading firms from the industry such as McCormick & Co., Inc. (MKC) have delivered in-line earnings but have lagged the revenue mark. Meanwhile, Ingredion, Inc. (INGR) beat earnings but missed revenues. Post Holdings, Inc. (POST) delivered better-than-expected results in the first quarter of fiscal 2017. We believe that strong brand portfolio, continuous innovation, cost saving initiatives and acquisitions have cushioned these companies against headwinds.

Let's see what awaits these food stocks, which are scheduled to release their quarterly numbers on Feb 15.

The Kraft Heinz CompanyKHC , Pittsburgh, PA-based packaged food company, is scheduled to report fourth-quarter 2016 results, after the closing bell.

Last quarter, the company posted a positive earnings surprise of 9.21%. The company surpassed estimates in all of the past four quarters and has an average positive surprise of 13.88%.

Currently, the company has a Zacks Rank #3 (Hold) and an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 87 cents. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Our proven model does not conclusively show that Kraft Heinz is likely to beat earnings this quarter. Per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 to beat earnings.

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 87 cents, reflecting a significant 40.1% year-over-year increase. Meanwhile, our estimate for revenues is $6.77 billion, implying a 5% decline (read more: Can Kraft Heinz Spring a Surprise in Q4 Earnings? ).

The Kraft Heinz Company Price and EPS Surprise

The Kraft Heinz Company Price and EPS Surprise | The Kraft Heinz Company Quote

US Foods Holding Corp.USFD , a foodservice distributor, is scheduled to report fourth-quarter 2016 results, before the opening bell. The company markets and distributes fresh, frozen and dry food along with non-food products to foodservice customers.

Last quarter, the company's earnings met the Zacks Consensus Estimate.

Currently, the company has a Zacks Rank #2 and an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 48 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Thus, our model does not conclusively show an earnings beat for US Foods Holding this quarter.

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 48 cents. Meanwhile, the consensus estimate for revenues is $5.68 billion.

The Zacks Consensus Estimate for its current year earnings advanced 3.5% and 6.7% for the current quarter over the last 60 days. US Foods has gained 15.1% in the last three months.

US Foods Holding Corp. Price and EPS Surprise

US Foods Holding Corp. Price and EPS Surprise | US Foods Holding Corp. Quote

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The Kraft Heinz Company (KHC): Free Stock Analysis Report

US Foods Holding Corp. (USFD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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