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Pilgrim's Pride (PPC) Q4 Earnings: What's in the Offing?

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Pilgrim's Pride Corporation (PPC - Free Report) is scheduled to report fourth-quarter 2017 results on Feb 14, after the market closes.

The company pulled of positive average earnings surprise of 1.53% for the last four quarters. Notably, in third-quarter 2017 Pilgrim's Pride’s adjusted earnings of 98 cents per share surpassed the Zacks Consensus Estimate of 77 cents by 27.27%.

Let’s see how things are shaping up prior to this announcement.

Factors to Play

We fear that lingering headwinds might prove fatal for Pilgrim's Pride's performance in fourth-quarter 2017.

The company’s profitability in the upcoming quarter remains sensitive to market price as well as availability of certain products such as soybean meal, corn and sorghum. These items are used by the company as intermediate inputs in some of its offerings. Any sudden supply-demand imbalance or fluctuations in price of these materials might significantly raise the company's operational expenses, in turn, weighing on the company's bottom line in the quarters ahead.

The company also offers services in a highly competitive industry. Intense competition might lower aggregate market share and hence weigh over the company’s revenues and profitability going forward.

Also, sudden outbreak of a livestock disease or unfavorable government trading policies might hurt results going forward. 

Moreover, the United States Department of Agriculture’s forecast regarding rise in global corn stocks indicates a probable decline in Pilgrim's Pride's aggregate corn exports in fourth-quarter 2017.

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or 2 (Buy) or 3 (Hold) for a likely earnings beat.

Pilgrim's Pride Corporation Price and EPS Surprise

 

Pilgrim's Pride Corporation Price and EPS Surprise

Pilgrim's Pride Corporation price-eps-surprise | Pilgrim's Pride Corporation Quote

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

That is not the case here as we will see below.

Zacks ESP: Pilgrim's Pride currently has an Earnings ESP of -3.77%. This is because the Zacks Consensus Estimate of 53 cents, stands above the Most Accurate Estimate of 51 cents per share.

Zacks Rank: Pilgrim's Pride’s unfavorable Zacks Rank #4 (Sell), when combined with a negative Earnings ESP, makes surprise predictions difficult.

Note that 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 to Consider

Here are some stocks that you may want to consider from the Zacks Categorized Consumer Staples Sector, as our model shows that these have the right combination of elements to post an earnings beat:

Craft Brew Alliance, Inc. , with an Earnings ESP of +42.86% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Lamb Weston Holdings Inc. (LW - Free Report) , with an Earnings ESP of +1.91% and a Zacks Rank #2.

Monster Beverage Corp. (MNST - Free Report) , with an Earnings ESP of +0.68% and a Zacks Rank #2.

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