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Consumer Staples Stocks' Earnings on Oct 25: PG and CSV
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The Q3 earnings cycle is well on track with nearly 23.2% of the index’s total membership (as of Oct 21, 2016), that collectively account for almost 30% of the index’s total market capitalization, reporting their numbers.
For consumer staples, we have seen Q3 results from 28.6% of the sector’s total market cap, as of Oct 21. Reported results reveal 4.7% growth in third-quarter earnings despite a 0.9% drop in revenues.
Per the Zacks Earnings Trends report, Q3 is likely to be the first quarter to record positive earnings growth after 5 quarters of back-to-back declines. Total earnings are likely to be up 0.1% on 1.5% higher revenues. In contrast, the consumer staples sector is likely to register a 2.2% increase in earnings on 1.3% revenue growth.
The consumer staples sector has managed to perform fairly well in the past few months, buoyed by rising consumer confidence and an improving economy. Notably, consumer confidence -- a key determinant of the economy's health -- surged for the second consecutive month in September and is now at its highest level since the Great Recession, indicating that the economy is on the recovery path.
Indeed, the recent rebound in oil prices, improving labor market, increase in consumer confidence and a gradual improvement in the housing market signals that the economy is on a recovery mode, and undoubtedly the consumer staple sector presents itself as a lucrative investment hub. That said, the possibility of a Fed rate hike in December as well as persistent uncertainty about the global backdrop could limit staple stocks’ upside potential.
Heavyweights like PepsiCo Inc. (PEP - Free Report) , ConAgra Foods Inc. (CAG - Free Report) , Constellation Brands Inc. (STZ - Free Report) and McCormick & Co. (MKC - Free Report) have reported solid Q3 numbers despite currency headwinds and sluggishness in emerging markets.
Let’s take a look at a couple of consumer staple stocks that are scheduled to report their quarterly earnings on Oct 25.
The Procter & Gamble Company (PG - Free Report) is set to report first-quarter fiscal 2017 results, before the market opens. Last quarter, it posted a positive earnings surprise of 6.76%. In fact, despite sales remaining subdued, the consumer goods company posted positive earnings surprises in the past four quarters, with the average surprise being 5.83%.
However, Procter & Gamble is a Zacks Rank #3 (Hold) stock with an Earnings ESP of 0.00%. Our proven model does not conclusively show that Procter & Gamble is likely to beat on earnings this quarter.
For the fiscal first quarter, the Zacks Consensus Estimate for earnings is pegged at 98 cents, flat year over year. Meanwhile, the consensus estimate for revenues is pegged at $16.46 billion, implying a 0.4% decline.
As stated in the fourth-quarter earnings call, Procter & Gamble’s fiscal 2017 results are expected to be similar to the fourth quarter. The company expects fiscal 2017 sales growth of about 1%, including a 1-point impact from foreign exchange and divestitures. Organic sales growth is projected at around 2%. Earnings per share growth will likely be in the mid-single digits.
Pricing gains, productivity savings and lower overhead costs should provide bottom-line support despite top-line pressures like in the past quarters. While the company expects Fx to be a nominal headwind for fiscal 2017, it is likely to dent results in the first quarter (read more: Can Procter & Gamble Pull a Surprise in Q1 Earnings?).
Carriage Services Inc. (CSV - Free Report) , which provides death care services and merchandise in the U.S., will release third-quarter 2016 results after market close.
Carriage Services has a Zacks Rank #3 with an Earnings ESP of 0.00%. Hence, it does not conclusively show that Carriage Services is likely to beat on earnings this quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Last quarter, the company posted a negative earnings surprise of 7.50%. Yet, the company is experiencing strong growing contract averages, leveraging on solid margins and declining overhead costs as a percentage of revenues.
For the third quarter, the Zacks Consensus Estimate for earnings is pegged at 38 cents a share, reflecting an increase of 15.2% year over year, while the consensus for revenues is at $60.24 million, implying 3.2% year-over-year growth.
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Consumer Staples Stocks' Earnings on Oct 25: PG and CSV
The Q3 earnings cycle is well on track with nearly 23.2% of the index’s total membership (as of Oct 21, 2016), that collectively account for almost 30% of the index’s total market capitalization, reporting their numbers.
For consumer staples, we have seen Q3 results from 28.6% of the sector’s total market cap, as of Oct 21. Reported results reveal 4.7% growth in third-quarter earnings despite a 0.9% drop in revenues.
Per the Zacks Earnings Trends report, Q3 is likely to be the first quarter to record positive earnings growth after 5 quarters of back-to-back declines. Total earnings are likely to be up 0.1% on 1.5% higher revenues. In contrast, the consumer staples sector is likely to register a 2.2% increase in earnings on 1.3% revenue growth.
The consumer staples sector has managed to perform fairly well in the past few months, buoyed by rising consumer confidence and an improving economy. Notably, consumer confidence -- a key determinant of the economy's health -- surged for the second consecutive month in September and is now at its highest level since the Great Recession, indicating that the economy is on the recovery path.
Indeed, the recent rebound in oil prices, improving labor market, increase in consumer confidence and a gradual improvement in the housing market signals that the economy is on a recovery mode, and undoubtedly the consumer staple sector presents itself as a lucrative investment hub. That said, the possibility of a Fed rate hike in December as well as persistent uncertainty about the global backdrop could limit staple stocks’ upside potential.
Heavyweights like PepsiCo Inc. (PEP - Free Report) , ConAgra Foods Inc. (CAG - Free Report) , Constellation Brands Inc. (STZ - Free Report) and McCormick & Co. (MKC - Free Report) have reported solid Q3 numbers despite currency headwinds and sluggishness in emerging markets.
Let’s take a look at a couple of consumer staple stocks that are scheduled to report their quarterly earnings on Oct 25.
The Procter & Gamble Company (PG - Free Report) is set to report first-quarter fiscal 2017 results, before the market opens. Last quarter, it posted a positive earnings surprise of 6.76%. In fact, despite sales remaining subdued, the consumer goods company posted positive earnings surprises in the past four quarters, with the average surprise being 5.83%.
However, Procter & Gamble is a Zacks Rank #3 (Hold) stock with an Earnings ESP of 0.00%. Our proven model does not conclusively show that Procter & Gamble is likely to beat on earnings this quarter.
For the fiscal first quarter, the Zacks Consensus Estimate for earnings is pegged at 98 cents, flat year over year. Meanwhile, the consensus estimate for revenues is pegged at $16.46 billion, implying a 0.4% decline.
As stated in the fourth-quarter earnings call, Procter & Gamble’s fiscal 2017 results are expected to be similar to the fourth quarter. The company expects fiscal 2017 sales growth of about 1%, including a 1-point impact from foreign exchange and divestitures. Organic sales growth is projected at around 2%. Earnings per share growth will likely be in the mid-single digits.
Pricing gains, productivity savings and lower overhead costs should provide bottom-line support despite top-line pressures like in the past quarters. While the company expects Fx to be a nominal headwind for fiscal 2017, it is likely to dent results in the first quarter (read more: Can Procter & Gamble Pull a Surprise in Q1 Earnings?).
PROCTER & GAMBL Price and EPS Surprise
PROCTER & GAMBL Price and EPS Surprise | PROCTER & GAMBL Quote
Carriage Services Inc. (CSV - Free Report) , which provides death care services and merchandise in the U.S., will release third-quarter 2016 results after market close.
Carriage Services has a Zacks Rank #3 with an Earnings ESP of 0.00%. Hence, it does not conclusively show that Carriage Services is likely to beat on earnings this quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Last quarter, the company posted a negative earnings surprise of 7.50%. Yet, the company is experiencing strong growing contract averages, leveraging on solid margins and declining overhead costs as a percentage of revenues.
For the third quarter, the Zacks Consensus Estimate for earnings is pegged at 38 cents a share, reflecting an increase of 15.2% year over year, while the consensus for revenues is at $60.24 million, implying 3.2% year-over-year growth.
CARRIAGE SVCS-A Price and EPS Surprise
CARRIAGE SVCS-A Price and EPS Surprise | CARRIAGE SVCS-A Quote
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>