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General Mills Inc. (GIS - Analyst Report), a global consumer food company, is set to report fourth quarter and fiscal year 2013 results on Jun 26. Last quarter, it posted a 12.28% positive surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider this Quarter

General Mill’s fourth-quarter 2013 earnings outlook is quite weak with costs and taxes anticipated to rise. General Mills expects fourth-quarter earnings to decline from the comparable quarter last year, which witnessed 15% earnings growth due to higher supply chain costs, increased spending to support in-store merchandising and a higher tax rate.

Most of the estimates have been trending downwards, as a result of the expected decline in earnings in fourth quarter 2013.

Earnings Whispers?

Our proven model does not conclusively show that General Mills is likely to beat earnings this quarter. That is because a stock needs to have both a positive earnings expected surprise prediction or ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP:  General Mills currently has an ESP of -1.85%.

Zacks Rank #3 (Hold). General Mills’ Zacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult.

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 momentum.

Other Stocks to Consider

We also see likely earnings beats coming from these 3 companies from the same industry:

Chiquita Brands International Inc. (CQB - Snapshot Report), Earnings ESP of +26.83% and Zacks Rank #3 (Hold)

Diamond Foods, Inc. (DMND - Analyst Report), Earnings ESP of +33.33% and Zacks Rank #3 (Hold)

Dole Food Company Inc. , Earnings ESP of +9.09% and Zacks Rank #3 (Hold)

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