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Food manufacturer The J. M. Smucker Co. (SJM - Analyst Report) is set to report first quarter fiscal 2013 results on Aug 21, before the market opens. Last quarter, it posted a 12.7% positive surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider this Quarter

Smucker has been delivering solid results for the past few quarters, owing to its regular product innovations, strategic acquisitions, improving volumes, frequent dividend increases and share buybacks. Moreover, its key partnerships with Dunkin Brands Group, Inc. (DNKN) (to produce Dunkin' Donuts packaged coffee brand) and Green Mountain Coffee Roasters, Inc (GMCR) (to produce coffee brands for its popular K-Cups used in Keurig brewers) provide significant growth opportunities.

Despite the positives, we should not ignore the fact that lower green coffee costs have resulted in a decline in net price realization of Smucker’s products, which has dented the company’s sales in the last quarter. Still, we believe that improved volumes will offset the price declines in the upcoming quarter.

Moreover, Smucker’s decision to market and distribute Cumberland's sweeteners to foodservice customers in the U.S. and Canada, as per its distribution deal with Cumberland Packing Corp. last quarter, will prove beneficial in the upcoming quarter.

Earnings Whispers?

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

Negative Zacks ESP: The Most Accurate estimate stands at $1.14 while the Zacks Consensus Estimate is higher at $1.20. That is a difference of -5.00%.

Zacks Rank #3 (Hold): Smucker’s 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

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

Pilgrim’s Pride Corp. (PPC - Snapshot Report), Earnings ESP of +35.09% and a Zacks Rank #1 (Strong Buy).

Boston Beer Inc. (SAM - Analyst Report), Earnings ESP of +6.11% and a Zacks Rank #1.

Tyson Foods Inc.(TSN - Analyst Report), Earnings ESP of +2.90% and a Zacks Rank #2 (Buy).

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