Campbell Soup Co. (CPB - Analyst Report) , the manufacturer of high-quality foods and simple meals, is slated to report second-quarter fiscal 2014 results on Feb 14, 2014. In the last quarter, it posted a negative surprise of 24.1%. Let us see how things are shaping up for this announcement.
Factors this Past Quarter
Campbell Soup posted lower-than-expected first-quarter fiscal 2014 results. The company’s quarterly results were primarily suffered due to the late Thanksgiving holiday, weakness in core business categories, higher marketing expenses and recall of Plum Organics pouch products. Disappointed with its first-quarter performance, Campbell Soup lowered its adjusted earnings growth guidance range for fiscal 2014 to 2%–4% from 3%–5% forecasted earlier.
Our proven model does not conclusively show that Campbell Soup is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below.
Negative Zacks ESP: ESP for Campbell Soup is -2.74%. This is because the Most Accurate estimate stands at 71 cents, while the Zacks Consensus Estimate is pegged at 73 cents.
Zacks Rank #4 (Sell): Campbell Soup’s Zacks Rank #4 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.
Stocks that Warrant a Look
Here are some other companies you may want to consider as our model shows they have the right combination of elements:
ConAgra Foods, Inc. (CAG - Analyst Report) with anEarnings ESP of +1.54% and a Zacks Rank #2 (Buy).
J&J Snack Foods Corp. (JJSF - Snapshot Report) with an Earnings ESP of +2.67% and a Zacks Rank #2 (Buy).
Cabela’s Incorporated (CAB - Analyst Report) with an Earnings ESP of +2.13% and a Zacks Rank #3 (Hold).