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Kellogg (K) Queued for Q4 Earnings: What's in the Offing?
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Kellogg Company (K - Free Report) is likely to report an increase in the top line when it releases fourth-quarter 2020 numbers on Feb 11. The Zacks Consensus Estimate for quarterly revenues is pegged at about $3.5 billion, which indicates an increase of 9.4% from the prior-year quarter’s reported figure. For 2020, the consensus mark is pegged at around $13.9 billion that suggests growth of almost 2% from the year-ago period’s reported figure.
However, the company’s bottom line is expected to have declined in the fourth quarter. Although the Zacks Consensus Estimate has moved up by a couple of cents in the past 30 days to 90 cents per share, the estimate suggests a decline of 1.1% from the year-ago quarter’s reported figure. For 2020, the Zacks Consensus Estimate for earnings is pegged at $4.05 per share, which suggests an improvement of 2.8% from the prior-year’s reported figure. Notably, Kellogg delivered an earnings surprise of 3.4% in the last reported quarter. Also, this provider of ready-to-eat cereals and convenience foods has a trailing four-quarter earnings surprise of 12%, on average.
Kellogg has been benefiting from increased demand for packaged food products amid the coronavirus-led stockpiling. Such trends also helped the company retain its organic sales trend in third-quarter 2020, wherein the metric grew across all regions mostly on higher cereal sales. Demand increase for packaged food owing to pandemic-led higher at-home consumption is working well for Kellogg’s retail channel business, helping it counter the declines in food sold in the away-from-home network.
Incidentally, management expects organic sales growth of nearly 6% and adjusted operating profit increase of about 2% at constant currency in 2020. Further, adjusted earnings per share are expected to have grown nearly 2% in 2020. The company’s 2020 operating profit and earnings are expected to have been affected by the divestiture of cookies, fruit snacks, pie crusts and ice-cream cone businesses (concluded in July 2019).
In third-quarter earnings call, management stated that it expects the away-from-home business to remain soft, though the trend is anticipated to be moderate in the fourth quarter. The company stated that away-from-home sales are likely to take some time to stabilize as schools, lodging and travel are expected to take time to recover. Moreover, Kellogg highlighted that it expects at-home demand and emerging markets growth rate to have decelerated during the quarter under review.
Apart from this, the company has been incurring elevated costs related to operations amid the pandemic that are related to safety, logistics, temporary labor and employee benefits. Also, Kellogg had pushed certain investments related to brands, supply chain and commercial plans to the second half of 2020. Consequently, management expects advertising and consumer promotion investments to have increased in double-digits in the fourth quarter.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Kellogg this time around. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kellogg carries a Zacks Rank #4 (Sell) and an Earnings ESP of +0.03%.
Stocks With Favorable Combinations
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.
Newell Brands Inc. (NWL - Free Report) currently has an Earnings ESP of +1.30% and carries a Zacks Rank #3.
Tyson Foods, Inc. (TSN - Free Report) currently has an Earnings ESP of +0.16% and carries a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Image: Shutterstock
Kellogg (K) Queued for Q4 Earnings: What's in the Offing?
Kellogg Company (K - Free Report) is likely to report an increase in the top line when it releases fourth-quarter 2020 numbers on Feb 11. The Zacks Consensus Estimate for quarterly revenues is pegged at about $3.5 billion, which indicates an increase of 9.4% from the prior-year quarter’s reported figure. For 2020, the consensus mark is pegged at around $13.9 billion that suggests growth of almost 2% from the year-ago period’s reported figure.
However, the company’s bottom line is expected to have declined in the fourth quarter. Although the Zacks Consensus Estimate has moved up by a couple of cents in the past 30 days to 90 cents per share, the estimate suggests a decline of 1.1% from the year-ago quarter’s reported figure. For 2020, the Zacks Consensus Estimate for earnings is pegged at $4.05 per share, which suggests an improvement of 2.8% from the prior-year’s reported figure. Notably, Kellogg delivered an earnings surprise of 3.4% in the last reported quarter. Also, this provider of ready-to-eat cereals and convenience foods has a trailing four-quarter earnings surprise of 12%, on average.
Kellogg Company Price and EPS Surprise
Kellogg Company price-eps-surprise | Kellogg Company Quote
Key Factors
Kellogg has been benefiting from increased demand for packaged food products amid the coronavirus-led stockpiling. Such trends also helped the company retain its organic sales trend in third-quarter 2020, wherein the metric grew across all regions mostly on higher cereal sales. Demand increase for packaged food owing to pandemic-led higher at-home consumption is working well for Kellogg’s retail channel business, helping it counter the declines in food sold in the away-from-home network.
Incidentally, management expects organic sales growth of nearly 6% and adjusted operating profit increase of about 2% at constant currency in 2020. Further, adjusted earnings per share are expected to have grown nearly 2% in 2020. The company’s 2020 operating profit and earnings are expected to have been affected by the divestiture of cookies, fruit snacks, pie crusts and ice-cream cone businesses (concluded in July 2019).
In third-quarter earnings call, management stated that it expects the away-from-home business to remain soft, though the trend is anticipated to be moderate in the fourth quarter. The company stated that away-from-home sales are likely to take some time to stabilize as schools, lodging and travel are expected to take time to recover. Moreover, Kellogg highlighted that it expects at-home demand and emerging markets growth rate to have decelerated during the quarter under review.
Apart from this, the company has been incurring elevated costs related to operations amid the pandemic that are related to safety, logistics, temporary labor and employee benefits. Also, Kellogg had pushed certain investments related to brands, supply chain and commercial plans to the second half of 2020. Consequently, management expects advertising and consumer promotion investments to have increased in double-digits in the fourth quarter.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Kellogg this time around. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kellogg carries a Zacks Rank #4 (Sell) and an Earnings ESP of +0.03%.
Stocks With Favorable Combinations
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.
e.l.f. Beauty Inc. (ELF - Free Report) currently has an Earnings ESP of +21.15% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Newell Brands Inc. (NWL - Free Report) currently has an Earnings ESP of +1.30% and carries a Zacks Rank #3.
Tyson Foods, Inc. (TSN - Free Report) currently has an Earnings ESP of +0.16% and carries a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>