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Campbell Soup (CPB) to Report Q2 Earnings: What's in Store?
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Leading food products company Campbell Soup Company (CPB - Free Report) is slated to report second-quarter fiscal 2017 results on Feb 17. Last quarter, the company delivered a positive earnings surprise of 5.3%. Let’s see how things are shaping up for this announcement.
Campbell Soup Company Price, Consensus and EPS Surprise
Campbell Soup has outperformed the Zacks categorized Food – Miscellaneous/Diversified industry in the last six months, with its shares growing 4.3% while the industry dropped 4.7%. The company has been benefitting from its strategic initiatives, which is evident from its focus on acquisitions and joint ventures aimed at strengthening its brand portfolio. Further, the company is generating better-than-expected results from the three-year cost savings program, which is likely to drive growth. Clearly, Campbell remains committed on augmenting top-line growth and managing costs efficiently.
These factors also helped the company to deliver a solid start to the fiscal year, with the first quarter witnessed an improvement in earnings, EBIT as well as gross margin. However, the company has been witnessing soft performance at Campbell Fresh lately due to weak carrot sales and the lingering effect of the Bolthouse Farms product recall. Further, industry hurdles like food deflation and competition pose threats. Also, Campbell’s global presence exposes it to foreign currency headwinds, which is expected to have a nominal impact on the company’s fiscal 2017 performance.
Nonetheless, management remains focused on getting its Bolthouse Farms Protein PLUS drinks capacity on track, and is striving to regain carrot consumers by enhancing product quality. Given its endeavors to improve Campbell Fresh’s performance, better trends across the U.S. soup business, expected benefits from product launches and strength across Pepperidge Farm, the company remains positive on its growth prospects.
Moreover, the Zacks Consensus Estimate for the second quarter and fiscal 2017 has increased by a penny to 88 cents and $3.10, respectively, over the past 30 days. Given the mixed signals, we prefer to wait and see if Campbell Soup’s solid growth endeavors can help it counter the hurdles and position it for another surprise.
Earnings Whispers
Our proven model does not conclusively show that Campbell Soup 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Campbell Soup currently has an Earnings ESP of -1.14%. This is because, the Most Accurate estimate of 87 cents stands well below the Zacks Consensus Estimate of 88 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Campbell Soup’ Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against Sell-rated stocks (#4 or 5) 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:
Dean Foods Company , slated to release earnings on Feb 16, currently has an Earnings ESP of +2.44% and a Zacks Rank #3.
Costco Wholesale Corporation (COST - Free Report) , scheduled to report earnings on Mar 3, currently has an Earnings ESP of +0.74% and a Zacks Rank #3.
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Campbell Soup (CPB) to Report Q2 Earnings: What's in Store?
Leading food products company Campbell Soup Company (CPB - Free Report) is slated to report second-quarter fiscal 2017 results on Feb 17. Last quarter, the company delivered a positive earnings surprise of 5.3%. Let’s see how things are shaping up for this announcement.
Campbell Soup Company Price, Consensus and EPS Surprise
Campbell Soup Company Price, Consensus and EPS Surprise | Campbell Soup Company Quote
Factors Influencing This Quarter
Campbell Soup has outperformed the Zacks categorized Food – Miscellaneous/Diversified industry in the last six months, with its shares growing 4.3% while the industry dropped 4.7%. The company has been benefitting from its strategic initiatives, which is evident from its focus on acquisitions and joint ventures aimed at strengthening its brand portfolio. Further, the company is generating better-than-expected results from the three-year cost savings program, which is likely to drive growth. Clearly, Campbell remains committed on augmenting top-line growth and managing costs efficiently.
These factors also helped the company to deliver a solid start to the fiscal year, with the first quarter witnessed an improvement in earnings, EBIT as well as gross margin. However, the company has been witnessing soft performance at Campbell Fresh lately due to weak carrot sales and the lingering effect of the Bolthouse Farms product recall. Further, industry hurdles like food deflation and competition pose threats. Also, Campbell’s global presence exposes it to foreign currency headwinds, which is expected to have a nominal impact on the company’s fiscal 2017 performance.
Nonetheless, management remains focused on getting its Bolthouse Farms Protein PLUS drinks capacity on track, and is striving to regain carrot consumers by enhancing product quality. Given its endeavors to improve Campbell Fresh’s performance, better trends across the U.S. soup business, expected benefits from product launches and strength across Pepperidge Farm, the company remains positive on its growth prospects.
Moreover, the Zacks Consensus Estimate for the second quarter and fiscal 2017 has increased by a penny to 88 cents and $3.10, respectively, over the past 30 days. Given the mixed signals, we prefer to wait and see if Campbell Soup’s solid growth endeavors can help it counter the hurdles and position it for another surprise.
Earnings Whispers
Our proven model does not conclusively show that Campbell Soup 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Campbell Soup currently has an Earnings ESP of -1.14%. This is because, the Most Accurate estimate of 87 cents stands well below the Zacks Consensus Estimate of 88 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Campbell Soup’ Zacks Rank #2 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against Sell-rated stocks (#4 or 5) 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:
Papa John's International, Inc. (PZZA - Free Report) , expected to release earnings on Feb 21, currently has an Earnings ESP of +4.55% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dean Foods Company , slated to release earnings on Feb 16, currently has an Earnings ESP of +2.44% and a Zacks Rank #3.
Costco Wholesale Corporation (COST - Free Report) , scheduled to report earnings on Mar 3, currently has an Earnings ESP of +0.74% and a Zacks Rank #3.
Just Released – Driverless Cars: Your Roadmap to Mega-Profits Today
In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now>>