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McCormick & Company, Inc. (MKC - Analyst Report) is set to report fiscal fourth-quarter 2012 results before the opening bell on Jan 24. Last quarter, this global leader in flavors posted a 2.63% positive surprise. Let’s see how things are shaping up prior to the announcement.

Growth Factors this Past Quarter

McCormick’s cost saving initiatives, brand building investments and its growing presence in both the developed as well as the emerging markets have been the driving factors for this company.

The deals of 2011 (acquisitions of the U.S.-based Kitchen Basics, Inc. and Poland-based Kamis S.A and the joint venture with India-based Kohinoor Foods Ltd.) contributed significantly to sales growth in all the three quarters of fiscal 2012. In addition, the company anticipates expanding in China with the acquisition of Wuhan Asia-Pacific Condiments Co., Ltd. by mid-2013. Further, McCormick’s cost saving initiative, namely Comprehensive Continuous Improvement (‘CCI’) program, has remained very effective to fight the rising input costs and also allow increased brand buildings investments.

Growth Prospects in Fourth Quarter

For the upcoming quarter, McCormick will roll out new products like Hispanic rice mixes, frozen Simply Asia entrées and a holiday multi-pack of small-size Extracts to improve its portfolio of spices. Further, we believe that the cost saving initiatives and the upcoming acquisition in China will remain fruitful.

Despite the sluggish U.S. economy, currency headwinds and rising input costs, the company remains impressed with its strong brand portfolio, geographic acquisitions and ccost saving initiatives.

Other Stock to Consider

For a specialty food company worth considering, our model suggests that a stock needs to have both a positive Earnings Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3.

Flowers Foods Inc. (FLO - Snapshot Report), Earnings ESP of +4.00% and Zacks Rank #1 (Strong Buy)

ESP stands for Expected Surprise Prediction, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate.

McCormick carries a Zacks Rank #3 (Hold). Other specialty food companies include B&g Foods Inc (BGS - Snapshot Report) and Ingredion Inc (INGR - Snapshot Report), which are better positioned than McCormick and carry a Zacks Rank #1. Peers like Campbell Soup Co. (CPB - Analyst Report) hold a Zacks Rank #2 (Buy).

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