Fortune Brands Home & Security, Inc. is scheduled to report third-quarter 2022 results on Oct 26, after market close.

The Zacks Consensus Estimate for FBHS’s third-quarter earnings has been revised 0.2% upward in the past 60 days. FBHS has an impressive surprise history, with its earnings having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 4.5%.

Let’s see how things are shaping up for Fortune Brands this earnings season.

Key Factors and Estimates for Q3

The Outdoors & Security segment is likely to have been aided by higher decking sales and volume growth at its door brand, Therma-Tru, in the third quarter. The Zacks Consensus Estimate for Outdoors & Security segment’s third-quarter revenues is pegged at $587 million, which indicates an 11.2% increase from the year-ago quarter’s reported number.

Fortune Brands’ Cabinets segment is anticipated to have benefited from transformational efforts and volume growth in the third quarter. The consensus mark for the segment’s revenues stands at $765 million, implying 6.7% growth from the year-earlier quarter figure.

However, the Water innovations segment is likely to have put up a weak show in the third quarter due to COVID-related shutdowns in China and foreign currency headwinds. The Zacks Consensus Estimate for the segment’s third-quarter revenues is pegged at $725 million, which indicates a 2.2% decrease from the year-ago quarter’s reported number.
 

Fortune Brands’ third-quarter performance is expected to have been hampered by supply-chain constraints, inflation in raw material prices and labor challenges. The rising cost of sales, as well as selling, general and administrative expenses might have dented FBHS’s bottom line in the to-be-reported quarter.

Weakness in the US housing market due to inflation and rising interest rates might have impacted FBHS’ third-quarter performance.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Fortune 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 odds of an earnings beat. But this is not the case here, as you will see below.

You can uncover the best stocks before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Fortune Brands has an Earnings ESP of +0.29%, as the Most Accurate Estimate is pegged at $1.71, higher than the Zacks Consensus Estimate of $1.70.

Zacks Rank: Fortune Brands currently carries a Zacks Rank #4 (Sell).

Highlights of Q2 Earnings

Fortune Brands reported second-quarter 2022 earnings before charges/gains of $1.67 per share, which surpassed the Zacks Consensus Estimate of $1.58 by 5.7%. On a year-over-year basis, the bottom line increased 7.1%. In the second quarter, Fortune Brands’ net sales were $2,111 million, increasing 9% from the year-ago quarter’s figure. The improvement was driven by solid performances across most of its segments. Also, the top line beat the consensus estimate of $2,035 million by 3.7%.

Stocks to Consider

Here are some other companies worth considering, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.

Sonoco Products Company (SON Quick QuoteSON - Free Report) has an Earnings ESP of +4.20% and a Zacks Rank #3 at present. SON is slated to release third-quarter 2022 results on Oct 31.

Sonoco’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average being 4.1%.

Emerson Electric Co. (EMR Quick QuoteEMR - Free Report) currently has an Earnings ESP of +1.08% and a Zacks Rank of 3. EMR is scheduled to release fourth-quarter fiscal 2022 (ended Sep 30, 2022) results on Nov 2.

Emerson’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6%.

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