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Can Newell's (NWL) Q3 Earnings Maintain its Robust Streak?
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Newell Brands Inc. (NWL - Free Report) is slated to report third-quarter 2016 results on Oct 28. Last quarter, the company delivered a positive earnings surprise of 6.9%. In fact, the company has outperformed the Zacks Consensus Estimate in 25 out of the past 27 quarters, with an average beat of 4.9% over the trailing four quarters. Let’s see how things are shaping up for this announcement.
Newell’s superb earnings history reflects the splendid performance of its brand, constant focus on growth initiatives and solid progress on its Project Renewal program, which have been largely benefiting the company by generating consistent cost savings. Apart from this, Newell’s commitment toward strengthening its portfolio through strategic acquisitions and reducing activities with marginal profitability bodes well. In fact, the company is well on track with Jarden’s integration, which was acquired in Apr 2016.
However, Newell’s significant global presence exposes it to foreign currency headwinds. Thus, the prevalence of these challenges may dent the company’s results. Nonetheless, given its impressive business trends and Jarden’s acquisition, Newell remains confident of achieving its sales and earnings targets for 2016, as is reflected by its outlook.
So let’s see whether Newell can keep its spectacular track record in place this time around too.
Earnings Whispers
Our proven model does not conclusively show that Newell is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Newell currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 73 cents.
Zacks Rank: Newell’s Zacks Rank #3 (Hold) increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Caterpillar Inc. (CAT - Free Report) , scheduled to release earnings on Oct 25, 2016, currently has an Earnings ESP of +1.33% and a Zacks Rank #2 (Buy).
Amazon.com, Inc. (AMZN - Free Report) , slated to release earnings on Oct 27, 2016, currently has an Earnings ESP of +6.98% and a Zacks Rank #1.
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Can Newell's (NWL) Q3 Earnings Maintain its Robust Streak?
Newell Brands Inc. (NWL - Free Report) is slated to report third-quarter 2016 results on Oct 28. Last quarter, the company delivered a positive earnings surprise of 6.9%. In fact, the company has outperformed the Zacks Consensus Estimate in 25 out of the past 27 quarters, with an average beat of 4.9% over the trailing four quarters. Let’s see how things are shaping up for this announcement.
NEWELL BRANDS Price and EPS Surprise
NEWELL BRANDS Price and EPS Surprise | NEWELL BRANDS Quote
Factors Influencing This Quarter
Newell’s superb earnings history reflects the splendid performance of its brand, constant focus on growth initiatives and solid progress on its Project Renewal program, which have been largely benefiting the company by generating consistent cost savings. Apart from this, Newell’s commitment toward strengthening its portfolio through strategic acquisitions and reducing activities with marginal profitability bodes well. In fact, the company is well on track with Jarden’s integration, which was acquired in Apr 2016.
However, Newell’s significant global presence exposes it to foreign currency headwinds. Thus, the prevalence of these challenges may dent the company’s results. Nonetheless, given its impressive business trends and Jarden’s acquisition, Newell remains confident of achieving its sales and earnings targets for 2016, as is reflected by its outlook.
So let’s see whether Newell can keep its spectacular track record in place this time around too.
Earnings Whispers
Our proven model does not conclusively show that Newell is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: Newell currently has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 73 cents.
Zacks Rank: Newell’s Zacks Rank #3 (Hold) increases the predictive power of ESP. However, the company’s ESP of 0.00% makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Caterpillar Inc. (CAT - Free Report) , scheduled to release earnings on Oct 25, 2016, currently has an Earnings ESP of +1.33% and a Zacks Rank #2 (Buy).
Big 5 Sporting Goods Corp. (BGFV - Free Report) , expected to report earnings on Oct 25, 2016, currently has an Earnings ESP of +3.33% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Amazon.com, Inc. (AMZN - Free Report) , slated to release earnings on Oct 27, 2016, currently has an Earnings ESP of +6.98% and a Zacks Rank #1.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>