Pilgrim's Pride Corporation (PPC) is scheduled to report third-quarter 2014 results on Oct 29 after the market closes. The Zacks Consensus Estimate for the quarter is pegged at 85 cents per share.
The company posted better-than-expected results in the trailing four quarters, with an average earnings surprise of +7.65%. For the quarter ending Jun 2014, earnings of 73 cents per share surpassed the Zacks Consensus Estimate by 4.29%. Let us see how things are shaping up for Pilgrim's Pride Corporation this quarter.
Factors to Influence Q3 Results
Investors’ sentiments for Pilgrim’s Pride are on the rise, with the stock having gained roughly 64.2% year to date. Further, the earnings estimates have been revised upwards for third-quarter 2014 by approximately 29%, as well as for 2014 and 2015, over the last 60 days. Such positive indicators denote a healthy outlook for the quarters ahead.
Pilgrim’s Pride is all set for expansion through investments aimed at improving its existing business. Also, growing export demand coupled with accretive acquisitions will act as an added advantage. The company is in the process of acquiring the Mexican poultry business of Tyson Foods, Inc. (TSN), expecting to garner annualized incremental revenue of $650 million.
However, reduced supply of raw materials along with other products may impact Pilgrim’s Pride’s financials adversely. Also, the cost of raw materials and operating expenses needs to be checked on a constant basis. Besides these, stiff competition in the industry is another matter of concern.
Earnings Whispers?
Our proven model does not conclusively show that Pilgrim's Pride Corporation is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: Expected Surprise Prediction or ESP of Pilgrim's Pride Corporation is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at 85 cents per share.
Zacks Rank: Pilgrim's Pride Corporation currently sports a Zacks Rank #1 (Strong Buy). This rank, when combined with a 0.00% ESP, makes surprise predictions difficult.
We caution against stocks with Zacks Ranks #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.
Other Stocks to Consider
Here are two companies in the food industry that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Post Holdings, Inc. (POST), with an Earnings ESP of +50.00% and a Zacks Rank #1.
Sanderson Farms, Inc. (SAFM), with an Earnings ESP of +9.00% and a Zacks Rank #2 (Buy).
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