Meat products company Pilgrim's Pride Corporation (PPC) is set to report first-quarter 2014 results on Apr 30, after the market closes. Last quarter, the company delivered 17.02% positive earnings surprise. Let’s see how things are shaping up for this announcement.
Factors to Consider this Quarter
Pilgrim’s Pride is the second largest chicken company globally, with over 5,000 customers. Although the company has long-term relationship with its customers, none of them accounts for more than 10% of the total sales, giving the company a diverse client base. The company is in the process of launching products to gain higher market share. The company has been experiencing year-over-year growth in sales in the past three years, both in the U.S. and internationally.
Pilgrim’s Pride is also making efforts to reduce its debt, which decreased $790 million year over year in 2013.
Earnings Whispers?
Our proven model does not conclusively show that Pilgrim’s Pride is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as we see below.
Zacks ESP: The Most Accurate estimate for Pilgrim’s Pride stands at 37 cents flat with the Zacks Consensus Estimate. Hence, the difference is 0.00%.
Zacks Rank: Pilgrim’s Pride has a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with Zacks Rank #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 other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Treehouse Foods, Inc. (THS), Earnings ESP of +1.25% and a Zacks Rank #2 (Buy).
General Mills, Inc. (GIS), Earnings ESP of +4.29% and a Zacks Rank #3.
The J. M. Smucker Company (SJM), Earnings ESP of +1.72% and a Zacks Rank #3.
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