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General Mills Inc. (GIS - Analyst Report) is set to report its second-quarter fiscal 2014 results on Dec 18 before the market opens. Last quarter, it posted in-line results. 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, management announced last month that food/beverage sales have slowed down a bit across key developed markets in the second quarter of 2014 which could pressurize volumes. For General Mills, especially, two of its most important categories – cereals and yogurt – are showing sluggish results. Though this consumer food giant is making an effort to boost growth, the results are not expected to benefit the top line much in this quarter.

In addition, though commodity costs are expected to be lower in fiscal 2014 than 2013, inflation is expected to be higher in the first half than the second. Moreover, advertising costs could also increase substantially to support the aggressive product launch planned for the first half.

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 and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP:  The Earnings ESP is 0.00%.

Zacks Rank General Mills carries a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #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 consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

Snyder's-Lance, Inc. (LNCE - Snapshot Report), with Earnings ESP of +5.56% and a Zacks Rank #3 (Hold).

Mondelez International, Inc. (MDLZ - Analyst Report), with Earnings ESP of +2.33% and a Zacks Rank #3 (Hold).

Lorillard, Inc. (LO - Analyst Report), with Earnings ESP of +1.18% and a Zacks Rank #3 (Hold).

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