Back to top

Analyst Blog

Spectrum Brands Holdings Inc. (SPB - Snapshot Report) is scheduled to report its first-quarter fiscal 2014 results after the market closes on Jan 29. Last quarter, this global consumer products company posted a positive earnings surprise of approximately 3.53%. Let's see how things are shaping up for this announcement.

Growth Factors in the Past Quarter

Spectrum Brands’ strong fourth-quarter fiscal 2013 performance was mainly driven by improved top lines that stemmed from the Hardware & Home Improvement (HHI) business, which became accretive. The company had acquired Hardware & Home Improvement in Dec 2012. On a segmental basis, Global Batteries & Appliances, Home & Garden and HHI segments contributed to sales growth, while sales at the Global Pet Supplies segment was an offset. The company remains optimistic of its fiscal-2014 performance, projecting sales growth at or above the rate of GDP compared with fiscal-2013 net sales.

Earnings Whispers?

Our proven model does not conclusively project Spectrum Brands as likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, this is not the case here due to the following factors:
 
Zacks ESP: ESP for Spectrum Brands is 0.00% since the Most Accurate estimate stands at $1.02 per share, which is in line with the Zacks Consensus Estimate.

Zacks #3 Rank (Hold): Spectrum Brands' Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings surprise call. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into earnings announcement, especially when the company is undergoing negative estimate revisions.

Other Stocks to Consider

Spectrum Brands is not the only firm we are looking up to this earnings season. Our model shows that the following stocks have the right combination to post an earnings beat:

Michael Kors Holdings Limited’s (KORS - Analyst Report) Earnings ESP stands at +1.15% and it carries a Zacks Rank #2 (Buy).

Abercrombie & Fitch Co. (ANF - Analyst Report) has an Earnings ESP of +1.96% and a Zacks Rank #2 (Buy).

The Home Depot Inc. (HD - Analyst Report) with an Earnings ESP of +1.39% holds a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%