Newell Rubbermaid Inc. (NWL) is scheduled to report its fourth-quarter fiscal 2014 results before the market opens on Jan 30. Last quarter, this producer of Sharpie pens and Rubbermaid containers posted a positive earnings surprise of approximately 5.5%. Let's see how things are shaping up for this announcement.
Factors Influencing the Upcoming Quarter
Newell is one of the leading manufacturers of home and office products in the U.S. So far, the company has posted better-than-expected earnings results for about 19 quarters. Its trailing four quarters average positive surprise stands at 6.6%. The company’s solid performance is attributable to its strong top-line results, better margins and continued gains from its Project Renewal program. Further, the company is optimistic about its fiscal 2014 results and provided an encouraging guidance for the year.
Earnings Whispers?
Our proven model does not conclusively project Newell as likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. This is not the case here, as you will see below:
Zacks ESP: ESP for Newell is 0.00% since the Most Accurate estimate stands at 48 cents per share, which is in line with the Zacks Consensus Estimate.
Zacks Rank: Newell carries a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s 0.00% ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:
Bebe Stores Inc.’s (BEBE) Earnings ESP stands at +50.00% and it carries a Zacks Rank #1 (Strong Buy).
Chipotle Mexican Grill Inc. (CMG) with an Earnings ESP of +3.18% holds a Zacks Rank #2 (Buy).
J. C. Penney Company Inc. (JCP) has an Earnings ESP of +23.08% and a Zacks Rank #2.
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