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Factors Setting the Tone for Campbell's (CPB) Q2 Earnings

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Campbell Soup Company (CPB - Free Report) is scheduled to release second-quarter fiscal 2020 results on Mar 4. This branded convenience food products company has trailing four-quarter positive earnings surprise of 11.8%, on average.

The Zacks Consensus Estimate for fiscal second-quarter earnings is pegged at 65 cents per share, which indicates 15.6% decline from the year-ago quarter’s reported figure. Notably, the consensus mark is unchanged in the past 30 days. The Zacks Consensus Estimate for revenues is at $2,155 million, which suggests a 20.6% decline from the year-ago quarter’s reported figure.

Campbell Soup Company Price and EPS Surprise

 

Campbell Soup Company Price and EPS Surprise

Campbell Soup Company price-eps-surprise | Campbell Soup Company Quote


Key Factors to Note

Campbell has been battling with cost inflation in the Meals & Beverages segment for a while now. Increased prices of steel cans along with vegetable and flower costs among others have led to higher input costs. Moreover, the company has been spending extensively on its marketing strategies. These factors are likely to have had a negative impact on Campbell’s performance in fiscal second quarter. Additionally, the impact of adverse currency fluctuation cannot be ignored.

Nevertheless, the company has been undertaking efforts to save costs. Also,, it has been focusing on strengthening the presence of its growing snack brands and improving the performance of the U.S. soup business. Management, in its last earnings call, highlighted that it anticipates improvement in sales for its U.S. soup business. Also, the company has been focusing on refining its portfolio, as part of which it offloaded Arnott’s and certain International operations on Dec 23, 2019.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Campbell this season 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 that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Campbell carries a Zacks Rank #4 (Sell) and Earnings ESP of -4.62%.

Stocks With Favorable Combination

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

Costco Wholesale (COST - Free Report) has an Earnings ESP of +0.20% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Casey's General (CASY - Free Report) has an Earnings ESP of + 3.45% and a Zacks Rank #3.

RH (RH - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank #3.

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