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Analyst Blog

The Procter & Gamble Company (PG - Analyst Report) is set to report fourth-quarter and full-year fiscal 2014 results on Aug 1, before the market opens. Last quarter, it delivered positive earnings surprise of 1.96%. Let’s see how things are shaping up for this announcement.

Factors to Consider This Quarter

Currency headwinds, rising commodity costs, increasing competitive pressures, challenging consumer spending environment in the U.S. and volatile market dynamics in other countries are expected to hurt profits in the quarter.

However, accelerated productivity gains and cost savings, higher pricing related to devaluation and lower tax rates should lend some positive support.

Earnings Whispers?

Our proven model does not conclusively show that P&G is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP:  The Earnings ESP for P&G is -1.10%.  

Zacks Rank: P&G carries a Zacks Rank #4 (Sell). 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

Other consumer staples stocks that have both a positive Earnings ESP and a favorable Zacks Rank are:

Colgate-Palmolive Co. (CL - Analyst Report), with an Earnings ESP of +1.37% and a Zacks Rank #2 (Buy).

The Clorox Company (CLX - Analyst Report), with an Earnings ESP of +1.49% and a Zacks Rank #3 (Hold).

Treehouse Foods, Inc. (THS - Snapshot Report), with an Earnings ESP of +1.21% and a Zacks Rank #1 (Strong Buy).