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Strong Demand Likely to Drive Newell's (NWL) Q4 Earnings
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Newell Brands Inc. (NWL - Free Report) is slated to report fourth-quarter 2020 results on Feb 12, before the opening bell. This global manufacturer and marketer of consumer and commercial products is likely to have witnessed revenue and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for fourth-quarter earnings has moved up 4.3% to 48 cents over the past 30 days, implying an increase of 14.3% from the year-ago quarter’s tally. Further, the consensus mark for quarterly revenues is pegged at $2,625 million, indicating 0.1% growth from the figure reported in the year-ago quarter.
In the last reported quarter, the Atlanta, GA-based company delivered an earnings surprise of 90.9%. Moreover, it delivered an earnings surprise of 53.8%, on average, in the trailing four quarters.
Given the COVID-19 situation, drastic changes in consumption patterns influenced by changing consumer habits have been a growth driver for Newell. Notably, the company has been witnessing sales growth in a few categories, leading to growth in the Food, Commercial, Appliances & Cookware and Outdoor & Recreation categories. Gains from these endeavors are likely to get reflected in the company’s fourth-quarter top line.
In fact, management in its last earnings call anticipated net sales to be $2.5-$2.6 billion, with core sales witnessing flat to low-single-digit growth. Also, normalized earnings were expected to be 40-46 cents, whose midpoint of 43 cents reflects an improvement from 42 cents reported in the last-year quarter. Moreover, it anticipates 2020 sales to be $9.2-$9.3 billion, with normalized earnings of $1.63-$1.69 per share.
Additionally, strength in e-commerce bodes well. With consumers’ sustained demand for the online platform due to the pandemic and its robust e-commerce capabilities, the company is likely to have retained its solid online trend in the quarter under review. Further, its Project FUEL plan for 2020, which focuses on enhancing productivity, looks encouraging.
However, Newell is reeling under unfavorable foreign currency, which has been hurting its operating segments. Also, management envisioned operating margin to contract 80-140 bps to 9.9-10.5% for the fourth quarter of 2020 due to a negative mix.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Newell Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’ve reported with our Earnings ESP Filter.
Newell Brands has a Zacks Rank #3 and an Earnings ESP of +1.30%.
More Stocks With Favorable Combinations
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat:
PepsiCo (PEP - Free Report) presently has an Earnings ESP of +0.59% and a Zacks Rank #3.
Tyson Foods (TSN - Free Report) presently has an Earnings ESP of +0.16% and 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: Bigstock
Strong Demand Likely to Drive Newell's (NWL) Q4 Earnings
Newell Brands Inc. (NWL - Free Report) is slated to report fourth-quarter 2020 results on Feb 12, before the opening bell. This global manufacturer and marketer of consumer and commercial products is likely to have witnessed revenue and earnings growth in the to-be-reported quarter.
The Zacks Consensus Estimate for fourth-quarter earnings has moved up 4.3% to 48 cents over the past 30 days, implying an increase of 14.3% from the year-ago quarter’s tally. Further, the consensus mark for quarterly revenues is pegged at $2,625 million, indicating 0.1% growth from the figure reported in the year-ago quarter.
In the last reported quarter, the Atlanta, GA-based company delivered an earnings surprise of 90.9%. Moreover, it delivered an earnings surprise of 53.8%, on average, in the trailing four quarters.
Newell Brands Inc. Price and EPS Surprise
Newell Brands Inc. price-eps-surprise | Newell Brands Inc. Quote
Key Factors to Note
Given the COVID-19 situation, drastic changes in consumption patterns influenced by changing consumer habits have been a growth driver for Newell. Notably, the company has been witnessing sales growth in a few categories, leading to growth in the Food, Commercial, Appliances & Cookware and Outdoor & Recreation categories. Gains from these endeavors are likely to get reflected in the company’s fourth-quarter top line.
In fact, management in its last earnings call anticipated net sales to be $2.5-$2.6 billion, with core sales witnessing flat to low-single-digit growth. Also, normalized earnings were expected to be 40-46 cents, whose midpoint of 43 cents reflects an improvement from 42 cents reported in the last-year quarter. Moreover, it anticipates 2020 sales to be $9.2-$9.3 billion, with normalized earnings of $1.63-$1.69 per share.
Additionally, strength in e-commerce bodes well. With consumers’ sustained demand for the online platform due to the pandemic and its robust e-commerce capabilities, the company is likely to have retained its solid online trend in the quarter under review. Further, its Project FUEL plan for 2020, which focuses on enhancing productivity, looks encouraging.
However, Newell is reeling under unfavorable foreign currency, which has been hurting its operating segments. Also, management envisioned operating margin to contract 80-140 bps to 9.9-10.5% for the fourth quarter of 2020 due to a negative mix.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Newell Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’ve reported with our Earnings ESP Filter.
Newell Brands has a Zacks Rank #3 and an Earnings ESP of +1.30%.
More Stocks With Favorable Combinations
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat:
Service Corporation International (SCI - Free Report) currently has an Earnings ESP of +3.68% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
PepsiCo (PEP - Free Report) presently has an Earnings ESP of +0.59% and a Zacks Rank #3.
Tyson Foods (TSN - Free Report) presently has an Earnings ESP of +0.16% and 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 >>