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Campbell Soup (CPB) Queued for Q3 Earnings: Things to Note

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Campbell Soup Company (CPB - Free Report) is likely to witness declines in the top and bottom lines, when it reports third-quarter fiscal 2021 numbers on Jun 9. The Zacks Consensus Estimate for revenues is pegged at $2,001 million, suggesting a fall of 10.6% from the prior-year quarter’s reported figure. In the last reported quarter, the company witnessed a 5% increase in revenues.

The Zacks Consensus Estimate for earnings has remained unchanged over the past 30 days at 66 cents per share, which suggests a dip of 20.5% from the figure reported in the prior-year period. The company has a trailing four-quarter earnings surprise of 6.9%, on average. In the last reported quarter, Campbell Soup posted an earnings surprise of 1.2%.

Campbell Soup Company Price, Consensus and EPS Surprise

Campbell Soup Company Price, Consensus and EPS Surprise

Campbell Soup Company price-consensus-eps-surprise-chart | Campbell Soup Company Quote

Key Factors to Note

Management, on its last earnings call, noted that it expects net sales in fiscal 2021 to decline in the band of 2.5-3.5%. Moreover, excluding the impact from a 53rd week in fiscal 2020 as well as divestiture of European Chips business, management expects organic net sales to fall 0.5-1.5% during this time frame. In fact, Campbell Soup highlighted that it expects third-quarter net sales and EBIT to have been more challenged than the fourth quarter. Notably, the third-quarter performance is expected to reflect adverse supply challenges stemming from winter storms. On its second-quarter earnings call, the company had stated that it saw nearly two weeks of disruption at its Paris, Texas facility thanks to the winter storms.

These factors raise concerns over the quarter under review. Apart from this, Campbell Soup has been struggling with cost inflation for a while now. That being said, the company’s focus on its multi-year cost-saving plan program is noteworthy. Additionally, Campbell Soup has been benefiting from its fast-growing Snacks business, backed by innovations as well as favorable customer response. The company is also gaining on high demand amid the pandemic-led elevated at-home consumption.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Campbell Soup 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.

Campbell Soup currently carries a Zacks Rank #3 and has an Earnings ESP of +2.05%.

Other 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 this season.

Lamb Weston (LW - Free Report) has an Earnings ESP of +2.73% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Altria Group (MO - Free Report) has an Earnings ESP of +4.02% and holds a Zacks Rank of 3.

General Mills (GIS - Free Report) has an Earnings ESP of +2.06% and a Zacks Rank #3.

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