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General Mills Inc. (GIS - Analyst Report) is set to report its first-quarter fiscal 2014 results on Sep 18 before the market opens. Last quarter, it posted a 1.9% negative surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider This Quarter

Though General Mills expects stronger earnings growth in fiscal 2014, we believe that the first quarter could be a little tough due to soft overall volume trends and recent negative momentum in the food sector. For General Mills, especially, two of its most important categories – cereals and yogurt – are showing sluggish results.

Though the company is making an effort to re-invigorate their growth, the results are not expected to benefit the top line in this quarter. However, cost savings and lower commodity cost inflation could prove to be tailwinds which are expected to be partially offset by higher advertising costs.

Earnings Whisper?

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 ESP (Read: Earnings ESP) 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:  The Earnings ESP is -1.43%.

Zacks #3 Rank (Hold): General Mills carries a Zacks Rank #3 (Hold) which lowers the predictive power of ESP because a 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 consumer staples companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

Treehouse Foods, Inc. (THS - Snapshot Report), Earnings ESP of +1.30% and a Zacks Rank #2 (Buy).

The J. M. Smucker Company (SJM - Analyst Report), Earnings ESP of +0.63% and a Zacks Rank #3 (Hold).

Ingredion Inc. (INGR - Snapshot Report), Earnings ESP of +2.36% and a Zacks Rank #3 (Hold).

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