Back to top

Can Archer Daniels (ADM) Surprise This Earnings Season?

Read MoreHide Full Article

Archer Daniels Midland Company (ADM - Free Report) , the world’s largest corn processor, is slated to report its first-quarter 2014 results on Apr 29, 2014. In the past quarter, it posted a positive surprise of 13.1%. Let us see how things are shaping up for this announcement.

Factors Affecting the Past Quarter

Archer Daniels posted better-than-expected fourth-quarter 2013 bottom-line results, primarily owing to robust operating performance at its Corn and Oilseeds Processing businesses, partly offset by lower profits at the Agricultural Services segment.

Earnings Whispers?

Our proven model does not conclusively show that Archer Daniels 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 Archer Daniels is -3.95%. This is because the Most Accurate Estimate stands at 73 cents, while the Zacks Consensus Estimate is pegged at 76 cents.

Zacks Rank #3 (Hold): Archer Daniels’ Zacks Rank #3, 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 that these have the right combination of elements to post an earning beat:

The Walt Disney Co. (DIS - Free Report) has an Earnings ESP of +1.03% and a Zacks Rank #2 (Buy).

Time Warner Inc. (TWX - Free Report) has an Earnings ESP of +1.14% and a Zacks Rank #3.

The Allstate Corp. (ALL - Free Report) has an Earnings ESP of +0.88% and a Zacks Rank #3.

More from Zacks Analyst Blog

You May Like