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Whirlpool (WHR) to Report Q3 Earnings: What's in Store?

Whirlpool CorporationWHR , the largest home-appliances manufacturer in the world, is slated to report third-quarter 2015 results on Oct 23, 2015. In the previous quarter, the company had delivered a positive earnings surprise of 1.2%. Let's see how things are shaping up for this announcement.

Factors to Consider This Quarter's Results

Whirlpool's surprise history is a mixed bag. With an average negative surprise of 1.35% over the trailing four quarters, the company has alternatively delivered positive and negative earnings surprises in them.

Though the company's fundamentals remain intact with its growth initiatives and shareholder-friendly moves, we remain slightly concerned due to its weak performance in the last reported quarter. Despite posting an earnings beat in the second quarter, Whirlpool's sales lagged estimates as soft Brazilian demand outweighed the sales gains in other geographic regions, mainly Europe and Asia. Also, the company's results are being persistently impacted by currency headwinds.

Further, we see little chances of recovery on these fronts in the short run as the currency headwinds are expected to persist through 2015 and the company expects shipments in Latin America to fall nearly 15% this year. This has triggered a downtrend in the Zacks Consensus Estimate over the last 60 days.

Consequently, we remain apprehensive about the company's upcoming results.

Earnings Whispers?

Our proven model does not conclusively show that Whirlpool is likely to beat estimates 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.

Zacks ESP: Whirlpool currently has an Earnings ESP of -5.85%. This is because the Most Accurate estimate of $3.06 is below the Zacks Consensus Estimate of $3.25 per share.

Zacks Rank: Whirlpool's Zacks Rank #3 (Hold) when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with a Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Starbucks Corporation SBUX has an Earnings ESP of +2.33% and a Zacks Rank #2 (Buy).

Amazon.com Inc.'s AMZN Earnings ESP is at +380.00% and it carries a Zacks Rank #3.

Boston Beer Co. Inc. SAM with an Earnings ESP of +4.26% holds a Zacks Rank #3.

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WHIRLPOOL CORP (WHR): Free Stock Analysis Report

AMAZON.COM INC (AMZN): Free Stock Analysis Report

STARBUCKS CORP (SBUX): Free Stock Analysis Report

BOSTON BEER INC (SAM): 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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