Evidently, the third quarter is on track to mark the first positive growth for the S&P 500 index after five consecutive quarters of earnings declines. Per our Earnings Preview report as of Nov 4, earnings for the total S&P 500 companies will improve 3% from the year-ago period with total revenue rising 1.5%.
As per the report, out of the 423 S&P 500 companies that have come up with their quarterly numbers, approximately 72.8% posted positive earnings surprises, while 55.1% beat top-line expectations. While total earnings for these index members were up 3.6% from the year-ago quarter, revenues increased 2.4%.
The performance of the index is not restricted to a single sector, and of the 16 Zacks sectors, four are expected to witness an earnings decline in the third quarter, with Auto, Oil/Energy and Transportation being a major drag. However, the Consumer Staples sector (that houses food and agriculture stocks, among others) is witnessing an improvement.
Total earnings for the Consumer Staples sector are estimated to rise 6.5%, whereas revenues are projected to improve 1.1%. So, let’s see what awaits the following food stocks within the Consumer Staples sector that are queued up for earnings releases on Nov 9.
Flowers Foods, Inc. (FLO - Free Report) is scheduled to release third-quarter 2016 results after the closing bell. Our proven model does not conclusively show that this leading producer and marketer of a full-line of bakery and dessert products 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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Flowers Foods has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
In the trailing four quarters, the company missed the Zacks Consensus Estimate by an average of 8.7%. The Zacks Consensus Estimate for the third quarter is currently pegged at 22 cents.
Next, let’s take a sneak peek at AdvancePierre Foods Holdings, Inc. (APFH - Free Report) , which is slated to release its third-quarter 2016 results before the market opens. The company has an Earnings ESP of +6.12% as the Most Accurate estimate stands at 52 cents and the Zacks Consensus Estimate is pegged at 49 cents. So the ensuing positive Earnings ESP and a Zacks Rank #2 make us reasonably confident of an earnings beat.
Another food stock, SunOpta Inc. (STKL - Free Report) is slated to release third-quarter 2016 results before the opening bell. In the trailing four quarters, this organic, non-GMO and specialty foods maker lagged the Zacks Consensus Estimate by an average of 22.9%. The Zacks Consensus Estimate for the quarter is pegged at 6 cents.
Our proven model does not conclusively show that SunOpta is likely to beat earnings estimates this quarter. This is because the company has an Earnings ESP of -16.67% and a Zacks Rank #4.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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