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Will Hormel's (HRL) Jennie-O Turkey Issue Hamper Q3 Earnings?
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Premium meat products company, Hormel Foods Corporation (HRL - Free Report) is slated to report third-quarter fiscal 2017 (ended Jul 31, 2017) results on Aug 24, before the market opens.
In the trailing four quarters, the company has delivered a negative average earnings surprise of 0.79%.
Let’s see how things are shaping up prior to this announcement.
Factors to Play
In the last three months, Hormel Foods’ shares lost 3.6%, as against 7.9% gain incurred by the industry.
Fall in turkey prices, extensive competition and increase in overall operating expenses have weighed on the Hormel Foods’ Jennie-O Turkey Store business segment’s performance in the preceding two quarters. The company perceives these headwinds to persist and in turn depress the top and bottom-line performance even in the second half of the fiscal year.
Moreover, other adverse headwinds such as a stronger U.S. currency, price inflation of major inputs (such as beef, pork and poultry) or outbreak of any livestock disease are likely to weigh over its revenues and profitability in the to-be-reported quarters.
However, amid the aforementioned negativities, Hormel Foods is poised to boost its near-term revenues on the back of stronger demand for popular brands like Skippy and Justin's. Moreover, the company’s ongoing $190 million capital expenditure plan for fiscal 2017 is likely to generate benefits moving ahead.
Earnings Whispers
Our proven model does not conclusively show that Hormel Foods 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Hormel Foods currently has an Earnings ESP of 0.00%. This is because the Zacks Consensus Estimate for the stock of 37 cents per share is in line with the Most Accurate estimate.
Zacks Rank: Hormel Foods’ unfavorable Zacks Rank #4 (Sell), when combined with a 0.00% ESP; makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Key Picks
Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
DISH Network Corporation , with an Earnings ESP of +0.78% and a Zacks Rank #3.
Charter Communications, Inc. (CHTR - Free Report) , with an Earnings ESP of +3.60% and a Zacks Rank #3.
Zacks' 10-Minute Stock-Picking Secret
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month.
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Will Hormel's (HRL) Jennie-O Turkey Issue Hamper Q3 Earnings?
Premium meat products company, Hormel Foods Corporation (HRL - Free Report) is slated to report third-quarter fiscal 2017 (ended Jul 31, 2017) results on Aug 24, before the market opens.
In the trailing four quarters, the company has delivered a negative average earnings surprise of 0.79%.
Let’s see how things are shaping up prior to this announcement.
Factors to Play
In the last three months, Hormel Foods’ shares lost 3.6%, as against 7.9% gain incurred by the industry.
Fall in turkey prices, extensive competition and increase in overall operating expenses have weighed on the Hormel Foods’ Jennie-O Turkey Store business segment’s performance in the preceding two quarters. The company perceives these headwinds to persist and in turn depress the top and bottom-line performance even in the second half of the fiscal year.
Moreover, other adverse headwinds such as a stronger U.S. currency, price inflation of major inputs (such as beef, pork and poultry) or outbreak of any livestock disease are likely to weigh over its revenues and profitability in the to-be-reported quarters.
However, amid the aforementioned negativities, Hormel Foods is poised to boost its near-term revenues on the back of stronger demand for popular brands like Skippy and Justin's. Moreover, the company’s ongoing $190 million capital expenditure plan for fiscal 2017 is likely to generate benefits moving ahead.
Earnings Whispers
Our proven model does not conclusively show that Hormel Foods 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Hormel Foods currently has an Earnings ESP of 0.00%. This is because the Zacks Consensus Estimate for the stock of 37 cents per share is in line with the Most Accurate estimate.
Hormel Foods Corporation Price and EPS Surprise
Hormel Foods Corporation Price and EPS Surprise | Hormel Foods Corporation Quote
Zacks Rank: Hormel Foods’ unfavorable Zacks Rank #4 (Sell), when combined with a 0.00% ESP; makes surprise prediction difficult.
Note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Key Picks
Here are some stocks that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Carnival Corporation (CCL - Free Report) , with an Earnings ESP of +0.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
DISH Network Corporation , with an Earnings ESP of +0.78% and a Zacks Rank #3.
Charter Communications, Inc. (CHTR - Free Report) , with an Earnings ESP of +3.60% and a Zacks Rank #3.
Zacks' 10-Minute Stock-Picking Secret
Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.
But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month.
Learn the secret >>