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Greif (GEF) to Report Q3 Earnings: What's in the Offing?

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Greif, Inc. (GEF - Free Report) is scheduled to release third-quarter fiscal 2020 (ended as of Jul 31, 2020) financial numbers, after the bell on Aug 26. The company has a trailing four-quarter average earnings surprise of 14.71%.

Where are the Q3 Estimates Treading?

The Zacks Consensus Estimate for the company’s earnings is pegged at 88 cents for the fiscal third quarter, suggesting a year-over-year plunge of 30.2%. We note that the consensus estimate has remained unchanged over the past 30 days.

The Zacks Consensus Estimate for total revenues for the quarter under review is pegged at $1.13 billion, suggesting a 10.1% decline from the year-ago quarter.

Share-Price Performance

Greif’s shares have appreciated 22.4% in the past year outperforming the industry’s growth of 8.9%.

Key Factors

Greif is poised to gain from its focus on operational execution and wide range of industrial packaging product portfolio. These factors are likely to have contributed to the fiscal third-quarter performance. Further, the company’s efforts to reduce costs in order to counter the softer market demand might have boosted margins during this period. However, demand softness within the textile, automotive, durable goods and lubricant industries, and the unfavorable impact of the coronavirus pandemic on the company’s global operations are concerns.

The Rigid Industrial Packaging & Services segment has been battling weak demand due to the deteriorating industrial-manufacturing environment. This is likely to have eroded the segment’s performance in the fiscal third quarter. Volatile currency-exchange rates are also likely to have depressed the segment’s bottom-line performance. The Zacks Consensus Estimate for the segment’s sales is pegged at $642 million for the to-be-reported quarter, flat year over year.

The company’s Paper Packaging segment is likely to have benefited from the Caraustar acquisition and various new capital growth projects during the fiscal third quarter. Given the pandemic-related crisis, increased packaging demand for food and grocery products, corrugated containers and other corrugated products might have contributed to the segment’s performance. The segment’s margin might have benefited from lower input costs. However, divestment of the consumer packaging business is likely to have marred the segment. The Zacks Consensus Estimate for the segment’s quarterly net sales is currently pegged at $519 million, calling for a year-over-year decline of 2.1%.

The Zacks Consensus Estimate for the Flexible Products & Services segment’s revenues is pegged at $71 million, suggesting a 5.3% fall from the prior-year quarter.

The Zacks Consensus Estimate for the Land Management segment’s revenues is pinned at $6 million, flat year over year.

Earnings Whispers

Our proven model doesn’t conclusively predict an earnings beat for Greif this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Greif is 0.00%.

Zacks Rank: Greif currently carries a Zacks Rank of 3.

Stocks Worth a Look

Here are some stocks worth considering as these have the right combination of elements to post an earnings beat this quarter.

Autodesk, Inc. (ADSK - Free Report) has an Earnings ESP of +4.44% and holds a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bank of Montreal (BMO - Free Report) has an Earnings ESP of +7.73% and carries a Zacks Rank #3, currently.

Bill.com Holdings, Inc. (BILL - Free Report) , currently a Zacks #3 Ranked stock, has an Earnings ESP of +10.45%.

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