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What's in the Cards for Newell Brands (NWL) in Q2 Earnings?

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Newell Brands Inc. (NWL - Free Report) is slated to report second-quarter 2017 results on Aug 4, before the opening bell. In the previous quarter, the company reported earnings surprise of 17.2%. Notably, in three of the trailing four quarters, the company’s earnings have surpassed the Zacks Consensus Estimate by an average of 7.7%.

What to Expect?

The big question facing investors is whether this global manufacturer and marketer of consumer and commercial products will be able to deliver a positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is 86 cents, reflecting a year-over-year increase of 10.3%. We note that the Zacks Consensus Estimate has witnessed upward revisions in the past 30 days. Analysts polled by Zacks expect revenues of $3,959 million, compared with $3,859 million reported in the prior-year quarter.

We note that the stock has outperformed the industry in the past three months. The company’s shares have jumped 13.2%, while the industry has declined 3.2%.

Factors Influencing This Quarter

Newell’s superb earnings history reflects the splendid performance of its brand as well as Growth Game Plan, ongoing Project Renewal Program and solid acquisitions. The company has also made significant progress on its Growth Game Plan that targets accelerating growth by simplifying and strengthening portfolio.

The company’s results in the second quarter are expected to be driven by core sales growth, Project Renewal savings and cost synergies. Further, it remains impressed with global growth and progress with e-commerce advancement. Moreover, the company earlier raised adjusted earnings outlook for 2017, while keeping the other forecasts intact. The raised earnings view reflects the timing of acquisitions and divestitures, and currency impacts. Normalized earnings per share for 2017 are anticipated in the range of $3.00–$3.20, compared with $2.95−$3.15 guided earlier.

In first-quarter 2017, Newell made significant progress strengthening portfolio by completing six transactions in and just after the end of the quarter. The company completed two acquisitions including the Sistema food storage business and the WoodWick fragranced candles business, while divesting four businesses, namely tools, consumer storage totes, fire building and fire starting, as well as the rope and chain business.

However, the company’s significant global presence exposes it to currency woes. Moreover, intense competition and volatile consumer behavior remain the major threats, given its consumer-focused nature.

What Does the Zacks Model Unveil?

Our proven model does not conclusively show that Newell Brands is likely to beat on 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. Newell Brands has an Earnings ESP of +0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 86 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. The company’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.

Newell Brands Inc. Price, Consensus and EPS Surprise


Newell Brands Inc. Price, Consensus and EPS Surprise | Newell Brands Inc. Quote

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Kellogg Company (K - Free Report) has an Earnings ESP of +2.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Molson Coors Brewing Company (TAP - Free Report) has an Earnings ESP of +4.90% and a Zacks Rank #3.

Under Armour, Inc. (UAA - Free Report) has an Earnings ESP of +16.67% and a Zacks Rank #3.

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