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Tyson Foods Inc. (TSN - Analyst Report) is set to report its fiscal 2013 first quarter results on May 6, 2013 before the opening bell. In the last quarter, the company posted a 23.1% positive surprise. Let’s see how things are shaping up for this announcement.

Factors this Past Quarter

Strong sales in Chicken and Beef segments coupled with operational efficiency helped Tyson gain a decent profit in the past quarter. Moreover, Tyson is foraying into Mexican food business with its strategic acquisition of Don Julio. This is particularly encouraging as Mexican food is gaining fast popularity in the U.S. processed food industry.

However, rising input prices, skyrocketing cattle prices and grain costs have been crippling margins for the company. Moreover, currency headwind also posed a problem for Tyson, as its major portion of business is carried overseas.

Earnings Whispers?

Our proven model does not conclusively show that Tyson Foods is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings Expected Surprise Prediction or 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 Most Accurate estimate stands at 44 cents while the Zacks Consensus Estimate is at 46 cents. That is a difference of -4.35%.

Zacks Rank #4 (Sell): Tyson’sZacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Flowers Foods, Inc.(FLO - Snapshot Report), with an Earnings ESP of +14.63% and a Zacks Rank #1 (Strong Buy)

The Hillshire Brands Co. (HSH - Snapshot Report), with an Earnings ESP of +9.38% and a Zacks Rank #2 (Buy).

Molson Coors Brewing Company(TAP - Analyst Report), with an Earnings ESP of +2.86% and a Zacks Rank #3 (Hold)

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