Tractor Supply Company ( TSCO ) is slated to post its third-quarter 2014 results after the market closes on Oct 22, 2014. In the previous quarter, the company's earnings were in-line with the Zacks Consensus Estimate. Let's see how things are shaping up for this announcement.
Factors to Influence the Upcoming Quarter
Tractor Supply, during its last quarter conference call, revealed that its financial results might continue to be affected by certain factors similar to those which impacted its second-quarter results. During second-quarter, although, Tractor Supply's top and bottom lines came in line with the Zacks Consensus Estimate and marked a year-over-year improvement, the company witnessed weaker-than-anticipated sales of some seasonal merchandise especially in the Northern regions, as well as soft sales results in the safe category.
As a result, the company has leaned toward the lower end of its previously stated guidance ranges for fiscal 2014. Previously, the company projected sales of about $5.62-$5.70 billion, comps in the 2.5%−4.0% range and earnings in the band of $2.54-$2.62 per share. Therefore, we remain skeptical about the company's performance in the third quarter.
Our proven model does not conclusively show that Tractor Supply is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) 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: Tractor Supply currently has an Earnings ESP of 0.00%. This is because the Most Accurate estimate is in line with the Zacks Consensus Estimate of 51 cents per share.
Zacks Rank: Tractor Supply's Zacks Rank #4 (Sell) when combined with a zero ESP makes surprise prediction unlikely. We caution against stocks with a Zacks Ranks #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:
The New York Times Company ( NYT ) has an Earnings ESP of +100% and a Zacks Rank #1 (Strong Buy).
Under Armour Inc.'s ( UA ) Earnings ESP stands at +2.50% and it carries a Zacks Rank #2 (Buy).
Jarden Corp. ( JAH ) with an Earnings ESP of +0.86% holds a Zacks Rank #2.