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Food products company, ConAgra Foods, Inc. (CAG - Analyst Report) is set to report fiscal third-quarter 2014 results on Mar 20, before the opening bell. In the last quarter, it delivered 12.73% positive earnings surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider

In the second quarter of fiscal 2014, ConAgra posted impressive results. Earnings per share increased 9% year over year to 62 cents, primarily due to a rise in sales. Revenues increased 26% year over year to $4.7 billion on the back of accretive acquisitions.

However, the company recently cut its quarterly guidance due to a longer-than-expected delay in restoring the Private Brands segment to planned levels of operating profit. The inordinate delay was caused by dismal levels of customer service, pricing and sales force coverage issues.Per the new guidance, adjusted earnings per share in fiscal third-quarter 2014 are expected to be 60 cents, while that for the fourth quarter is expected to be 65 cents. Ralcorp is expected to contribute 20 cents to fiscal 2014 earnings, down from 25 cents.

In the second half of fiscal 2014, volume decline for Consumer Foods segment is expected in the range of 3%–4%, versus 1%–2% expected earlier. In fiscal 2014, cash flow from operating activities is estimated at $1.4 billion. The company expects to repay $1.5 billion debt by fiscal 2015.

Earnings Whispers?

Our proven model does not conclusively show that ConAgra is likely to beat earnings this quarter. That is because a stock needs to have both a positive Zacks Earnings ESPand a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as we see below.

Zacks Earnings ESP:  The Most Accurate estimate stands at 60 cents flat with the Zacks Consensus Estimate. This translates to Earnings ESP of 0.00%.

Zacks Rank: ConAgra’s Zacks Rank #4 (Sell) when combined with a 0.00% Earnings 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 a negative estimate revision momentum.

Other Stocks to Consider

Here are other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Tyson Foods, Inc. (TSN - Analyst Report), Earnings ESP of +9.52% and a Zacks Rank #1 (Strong Buy).

Coca-Cola Enterprises Inc. (CCE - Analyst Report), Earnings ESP of +4.55% and a Zacks Rank #2 (Buy).

Mead Johnson Nutrition Company (MJN - Analyst Report), Earnings ESP of +1.09% and a Zacks Rank #3 (Hold).

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