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The Procter & Gamble Company (PG - Analyst Report) is set to report its third-quarter fiscal 2013 results on Apr 24 before the market opens. Last quarter it posted a nearly +10% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Earnings also grew 12% from the prior-year quarter driven by organic sales growth and improved productivity. Organically, revenues improved 3% driven by improving global market share trends, lower-than-expected currency headwinds and decent volume growth. Also, both earnings and revenues were better than management’s expectations.

Fiscal 2012 was a tough year for P&G and the company plans to implement some meaningful changes to re-accelerate its top and bottom line. In addition, the company has implemented several cost-savings and productivity-improvement initiatives in order to improve margins. We believe P&G is gaining momentum from these efforts as is evident from two back-to-back solid quarterly results.

Earnings Whispers?

Our proven model does not conclusively show that P&G is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP:  The Earnings ESP is 0.0%.  

Zacks #3 Rank (Hold):  P&G’s Zacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a 0.0% ESP makes surprise prediction difficult. We caution against stocks with Zacks #4 and #5 Ranks (Sell-rated stocks) going into the earnings announcement.

In the third quarter, the company expects to earn 90 cents to 96 cents. The Zacks Consensus Estimate stands at the higher end of 96 cents. In the third quarter of fiscal 2013, the company expects both net and organic revenues to range between 3% and 4%.

While the guidance range represents a flat sequential growth at the lower end of 3%, it represents sequential improvement at the higher end of 4%.  Foreign exchange is expected to have a neutral impact on sales.

Other Stocks to Consider

Here are some other consumer staples companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

  • Flower Foods Inc. (FLO - Snapshot Report), with Earnings ESP of +4.88% and a Zacks Rank #1 (Strong Buy)
  • Kraft Foods Group, Inc. (KRFT - Analyst Report), with Earnings ESP of +3.13% and a Zacks Rank #2 (Buy)
  • Church & Dwight Co. Inc. (CHD - Snapshot Report), with Earnings ESP of +1.39% and a Zacks Rank #3 (Hold)

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