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Food Stocks to Report Earnings on Feb 6: TSN, SYY, HAIN
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The fourth-quarter earnings season has picked up pace, and investors seem to be happy as Q4 is on track to record the best performance in the last eight quarters. At present, sectors including finance, technology, construction, industrial products, basic materials and consumer discretionary look promising and are delivering improved growth in the current quarter. However, the pace of growth is currently modest and positive earnings surprises are not clearly visible. Nevertheless, it is better than the historical levels.
On summarizing the performance of the 219 S&P 500 members that have reported financial results as of Feb 1, we see that total earnings of these companies were up 5.4% on a year-over-year basis (64.8% of the companies beat EPS estimates) while total revenue increased 3.5% (53.4% beat top-line expectations).
Per the Zacks Earnings Trends report, overall fourth-quarter earnings for the S&P 500 companies are anticipated to be up 6.0% from the year-ago quarter on a 3.9% rise in revenues.
In the consumer staples sector, 28.1% of the companies have reported results as of Feb 1. Out of these, 55.6% companies posted an earnings beat (growing 1.5% year over year), while 33.3% surpassed revenue estimates (declining 3.6% year over year). Total earnings for the sector are expected to increase 9.6% on the back of 4.1% revenue growth and 0.6% higher margins, which might prove to be profitable in the long term.
Food/beverage stocks have posted mixed results this earnings season. Leading firms from the industry such as McCormick & Co., Inc. (MKC - Free Report) have delivered in-line earnings, but lagged on revenues. Ingredion, Inc. (INGR - Free Report) beat on earnings but missed on revenues. Post Holdings, Inc. (POST - Free Report) delivered better-than-expected first quarter fiscal 2017 results. We believe that strong brand portfolio, continuous innovation, cost saving initiatives and acquisitions have cushioned these companies against headwinds, and are expected to remain their strengths.
Let’s see what awaits these three food stocks, which are scheduled to release their quarterly earnings numbers on Feb 6.
Tyson Foods, Inc. (TSN - Free Report) is slated to release first-quarter fiscal 2017 results on Feb 6, 2017, before the market opens. Last quarter, this producer, distributor and marketer of chicken, beef, pork and prepared foods posted a negative earnings surprise of 22.6%. It has delivered an average positive earnings surprise of 8.5% in the trailing four quarters.
Our proven model does not conclusively show that Tyson Foods is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 for this to happen. The company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tyson Foods’ processed food business has been showcasing a decent performance. Further, the Hillshire Brands packaged foods buyout and healthy liquidity impart strength to the stock. However, Tyson has been witnessing soft results in the Beef, Chicken and Prepared Foods segment. Lower cattle supply and higher fed cattle costs have been responsible for the sluggishness in the segment. (Read: Tyson Foods to Report Q1 Earnings: What Lies in Store?).
Shares of the company have increased 25.5% over the last one year, compared with the Zacks categorized Food-Meat Products industry which has grown just 4.3% in the same time frame. Notably, the industry is part of the top 17% of the Zacks Classified industries (46 out of the 265). The broader Consumer Staples sector is placed at the bottom 13% of the Zacks Classified sectors (14 out of 16).
Sysco Corporation (SYY - Free Report) is set to report second-quarter fiscal 2017 results before the opening bell on Feb 6. Last quarter, this global food products maker and distributor posted a positive earnings surprise of 13.56%. In the trailing four quarters, the company beat earnings estimates in all the four quarters, which translated to an average positive surprise of 11.7%.
The company currently has an Earnings ESP of 0.00% and a Zacks Rank #3. Our proven model does not conclusively show that Sysco is likely to beat earnings estimates this quarter, as the company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Its strong portfolio of businesses and robust acquisitions have been the driving factors for the company. It is also encouraging to note that the company has delivered higher gross margins in the past one year, after witnessing a decline in the same since the last two fiscal years. However, Sysco expects food cost deflation and currency translation to impact its profits. (Read: Will Sysco Q2 Earnings Surprise Despite Headwinds?).
Sysco’s shares have been outperforming the Zacks categorized Food-Miscellaneous/Diversified industry over the past one year. The stock increased 20.6% in comparison to the Zacks categorized Food-Miscellaneous/Diversified industry, which recorded growth of only 9.9%. Notably, the industry is part of the bottom 45% of the Zacks Classified industries (146 out of the 265).
The Hain Celestial Group, Inc. (HAIN - Free Report) manufactures, markets, distributes, and sells organic and natural products in the U.S., the U.K., Canada, and Europe. It is slated to report second-quarter fiscal 2017 results on Feb 6. The company currently has an Earnings ESP of 0.00% and a Zacks Rank #3. Our proven model does not conclusively show that Hain Celestial is likely to beat earnings estimates this quarter, as the company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We note that over the past six months, the stock declined 24.3% compared with the Zacks categorized Food-Miscellaneous/Diversified industry's decline of 5.7%, due to internal issues within the company.
Stay tuned! Check later on our full write-up on earnings releases of these stocks.
Where Do Zacks' Investment Ideas Come From?
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Food Stocks to Report Earnings on Feb 6: TSN, SYY, HAIN
The fourth-quarter earnings season has picked up pace, and investors seem to be happy as Q4 is on track to record the best performance in the last eight quarters. At present, sectors including finance, technology, construction, industrial products, basic materials and consumer discretionary look promising and are delivering improved growth in the current quarter. However, the pace of growth is currently modest and positive earnings surprises are not clearly visible. Nevertheless, it is better than the historical levels.
On summarizing the performance of the 219 S&P 500 members that have reported financial results as of Feb 1, we see that total earnings of these companies were up 5.4% on a year-over-year basis (64.8% of the companies beat EPS estimates) while total revenue increased 3.5% (53.4% beat top-line expectations).
Per the Zacks Earnings Trends report, overall fourth-quarter earnings for the S&P 500 companies are anticipated to be up 6.0% from the year-ago quarter on a 3.9% rise in revenues.
In the consumer staples sector, 28.1% of the companies have reported results as of Feb 1. Out of these, 55.6% companies posted an earnings beat (growing 1.5% year over year), while 33.3% surpassed revenue estimates (declining 3.6% year over year). Total earnings for the sector are expected to increase 9.6% on the back of 4.1% revenue growth and 0.6% higher margins, which might prove to be profitable in the long term.
Food/beverage stocks have posted mixed results this earnings season. Leading firms from the industry such as McCormick & Co., Inc. (MKC - Free Report) have delivered in-line earnings, but lagged on revenues. Ingredion, Inc. (INGR - Free Report) beat on earnings but missed on revenues. Post Holdings, Inc. (POST - Free Report) delivered better-than-expected first quarter fiscal 2017 results. We believe that strong brand portfolio, continuous innovation, cost saving initiatives and acquisitions have cushioned these companies against headwinds, and are expected to remain their strengths.
Let’s see what awaits these three food stocks, which are scheduled to release their quarterly earnings numbers on Feb 6.
Tyson Foods, Inc. (TSN - Free Report) is slated to release first-quarter fiscal 2017 results on Feb 6, 2017, before the market opens. Last quarter, this producer, distributor and marketer of chicken, beef, pork and prepared foods posted a negative earnings surprise of 22.6%. It has delivered an average positive earnings surprise of 8.5% in the trailing four quarters.
The company has an Earnings ESP of -2.36% as the Most Accurate estimate of $1.24 is below the Zacks Consensus Estimate of $1.27. It has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Our proven model does not conclusively show that Tyson Foods is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 for this to happen. The company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tyson Foods’ processed food business has been showcasing a decent performance. Further, the Hillshire Brands packaged foods buyout and healthy liquidity impart strength to the stock. However, Tyson has been witnessing soft results in the Beef, Chicken and Prepared Foods segment. Lower cattle supply and higher fed cattle costs have been responsible for the sluggishness in the segment. (Read: Tyson Foods to Report Q1 Earnings: What Lies in Store?).
Shares of the company have increased 25.5% over the last one year, compared with the Zacks categorized Food-Meat Products industry which has grown just 4.3% in the same time frame. Notably, the industry is part of the top 17% of the Zacks Classified industries (46 out of the 265). The broader Consumer Staples sector is placed at the bottom 13% of the Zacks Classified sectors (14 out of 16).
Sysco Corporation (SYY - Free Report) is set to report second-quarter fiscal 2017 results before the opening bell on Feb 6. Last quarter, this global food products maker and distributor posted a positive earnings surprise of 13.56%. In the trailing four quarters, the company beat earnings estimates in all the four quarters, which translated to an average positive surprise of 11.7%.
The company currently has an Earnings ESP of 0.00% and a Zacks Rank #3. Our proven model does not conclusively show that Sysco is likely to beat earnings estimates this quarter, as the company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Its strong portfolio of businesses and robust acquisitions have been the driving factors for the company. It is also encouraging to note that the company has delivered higher gross margins in the past one year, after witnessing a decline in the same since the last two fiscal years. However, Sysco expects food cost deflation and currency translation to impact its profits. (Read: Will Sysco Q2 Earnings Surprise Despite Headwinds?).
Sysco’s shares have been outperforming the Zacks categorized Food-Miscellaneous/Diversified industry over the past one year. The stock increased 20.6% in comparison to the Zacks categorized Food-Miscellaneous/Diversified industry, which recorded growth of only 9.9%. Notably, the industry is part of the bottom 45% of the Zacks Classified industries (146 out of the 265).
The Hain Celestial Group, Inc. (HAIN - Free Report) manufactures, markets, distributes, and sells organic and natural products in the U.S., the U.K., Canada, and Europe. It is slated to report second-quarter fiscal 2017 results on Feb 6. The company currently has an Earnings ESP of 0.00% and a Zacks Rank #3. Our proven model does not conclusively show that Hain Celestial is likely to beat earnings estimates this quarter, as the company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We note that over the past six months, the stock declined 24.3% compared with the Zacks categorized Food-Miscellaneous/Diversified industry's decline of 5.7%, due to internal issues within the company.
Stay tuned! Check later on our full write-up on earnings releases of these stocks.
Where Do Zacks' Investment Ideas Come From?
You are welcome to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buy"" stocks free of charge. There is no better place to start your own stock search. Plus you can access the full list of must-avoid Zacks Rank #5 ""Strong Sells"" and other private research. See the stocks free >>