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What's in Store for B&G Foods (BGS) This Earnings Season?

B&G Foods, Inc.BGS is set to report third-quarter 2015 results on Oct 27 after markets closes. Last quarter, the company had posted a positive surprise of 3.03%. Let's see how things are shaping up for this announcement.

Factors to Consider

B&G Foods expects improving pricing and volume trends witnessed in the first half of the year to continue in the second half. It is important to note that B&G Foods increased the pricing of half of the product lines by about 2% effective Jan 1, 2015. The company expects the positive effective of higher pricing to benefit results in 2015 and eliminate commodity pressure.

In addition, Speciality brands has been performing well, driving the company's revenue in the past few quarters, a trend which should continue in the upcoming quarter as well.

However, the acquisitions made since May 2013 (Pirate Brands, Specialty Brands, Rickland Orchards and TrueNorth) is putting pressure short-term cost and efficiencies, thereby hurting earnings. We believe these headwinds will continue to hurt results through 2015.

Earnings Whisper?

Our proven model does not conclusively show that B&G Foods is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: B&G Foods' Earnings ESP is 0.00% as both the Most Accurate estimate and the Zacks Consensus estimate stand at 38 cents.

Zacks Rank #1 (Strong Buy): B&G Foods has a Zacks Rank #1 which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

Conversely, we caution against stocks with Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies in the broader food sector that can be considered as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Campbell Soup Company CPB has an Earnings ESP of +8.0% and a Zacks Rank #3.

The Kraft Heinz Company KHC has an Earnings ESP of +1.72% and a Zacks Rank #3.

Lancaster Colony Corporation LANC has an Earnings ESP of +2.22% and a Zacks Rank #2.

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B&G FOODS CL-A (BGS): Free Stock Analysis Report

CAMPBELL SOUP (CPB): Free Stock Analysis Report

LANCASTER COLON (LANC): Free Stock Analysis Report

KRAFT HEINZ CO (KHC): 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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