Central Garden & Pet CompanyCENT is slated to report second-quarter fiscal 2015 results on May 5. In the last quarter, the company had posted a positive earnings surprise of 45.5%. Let's see how things are shaping up for this announcement.
Factors Influencing This Quarter
Central Garden & Pet is revamping both its Pet and Garden segments. The company intends to adopt a balanced approach that encompasses revenue growth and cost reduction. However, management remains concerned about the wild bird feed business as it is expected to be hit by lower product pricing on account of a decline in raw material costs and tough competition. This may impact the results of the company in the quarter to be reported.
Our proven model does not conclusively show that Central Garden & Pet is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: Central Garden & Pet has an Earnings ESP of 0.00%. This is because the Most Accurate estimate and the Zacks Consensus Estimate both stand at 43 cents.
Zacks Rank: Central Garden & Pet has a Zacks Rank #3 (Hold). Though a Zacks Rank #3 increases the predictive power of ESP, the company's ESP of 0.00% 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 to Consider
Here are some other companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat:
Jack in the Box Inc. JACK has an Earnings ESP of +1.52% and a Zacks Rank #3.
Kate Spade & Company KATE has an Earnings ESP of +150.0% and a Zacks Rank #3.
Treehouse Foods, Inc. THS has an Earnings ESP of +1.72% and a Zacks Rank #3.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.