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Sealed Air (SEE) Q2 Earnings: Will the Stock Pull off a Beat?

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Sealed Air Corporation (SEE - Free Report) will release second-quarter 2017 results on Aug 8, before the opening bell.

In the first quarter, Sealed Air's top line and bottom line declined on a year-over-year basis. Sealed Air also lagged earnings estimates by 6.52% in the last reported quarter.

The company has delivered an average negative earnings surprise of 0.55% in the trailing four quarters. Let’s see how things are shaping up for this announcement.

Sealed Air Corporation Price and EPS Surprise

Sealed Air Corporation Price and EPS Surprise | Sealed Air Corporation Quote

Earnings Whispers

Our proven model shows that Sealed Air is likely to beat 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 at least 3 (Hold) for this to happen.

Zacks ESP: The Earnings ESP for Sealed Air is +1.82%. This is because the Most Accurate estimate of 37 cents is pegged higher than the Zacks Consensus Estimate of 36 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Sealed Air currently carries a Zacks Rank #3. The combination of a favorable rank and positive ESP makes us reasonably confident of an earnings beat.

Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors At Play

Sealed Air’s top-line will be supported by enhanced demand for its core product portfolio, recently-introduced innovations, and accelerated growth in the global protein market along with the eCommerce sector. Growth in red meat production this year could lead to a sizable pickup in North American Food Care operations. Overall, within Food Care, improvement will come on the back of growth in North America and improving trends in Europe, Middle East and Africa (EMEA). Within Product Care, continued expansion in the eCommerce and fulfillment markets, and stabilization in the industrial sector will help drive momentum.

However, the selective ban on the Brazilian beef export will be an impediment to volumes in Latin America. Results in APAC will be impacted as the Australia/New Zealand region rebuilds cattle herds, which is normally a two to four year process resulting in dairy markets remaining muted. Higher material costs, unfavorable impact of foreign currency will also dent results.

Share Price Performance

Sealed Air underperformed the industry in the past one year. While the stock dipped 11.6%, the industry recorded growth of 2.4%.

Stocks that Warrant a Look

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 this quarter:

Deere & Company (DE - Free Report) has an Earnings ESP of +5.32% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Regal Beloit Corporation (RBC - Free Report) has an Earnings ESP of +0.78% and a Zacks Rank #2.

Applied Industrial Technologies, Inc. (AIT - Free Report) has an Earnings ESP of +1.30% and a Zacks Rank #3.

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