Church & Dwight (CHD) Q1 Earnings: A Beat in the Cards?
Church & Dwight Co., Inc. CHD is slated to report first-quarter 2017 results on May 4, before the opening bell. The question lingering in investors’ minds is, whether this leading manufacturer and marketer of personal care, household and specialty products will be able to post a positive earnings surprise again in the to-be-reported quarter. The company’s earnings have outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 3.7%.
Let’s delve deeper how things are shaping up for this announcement.
What Does the Zacks Model Unveil?
Our proven model conclusively shows that Church & Dwight is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Church & Dwight Company, Inc. Price, Consensus and EPS Surprise
Church & Dwight Company, Inc. Price, Consensus and EPS Surprise | Church & Dwight Company, Inc. Quote
Church & Dwight has an Earnings ESP of +2.17%. This is because the Most Accurate estimate of 47 cents is pegged higher than the Zacks Consensus Estimate of 46 cents. Moreover, the company’s Zacks Rank #3 increases the predictive power of ESP, thus making us confident of earnings beat.
Which Way are Estimates Treading?
Let’s look at the estimate revisions in order to get a clear picture of what analysts are thinking about the company right before earnings release. The Zacks Consensus Estimate for the first quarter and 2017 has been stable over the last seven days. In fact, the current Zacks Consensus Estimate of 46 cents and $1.90 for the first quarter and 2017 reflects a year-over-year growth of 7% and 7.3%, respectively.
Moreover, analysts polled by Zacks expect revenues of $870.2 million for the said quarter, up 2.5% from the year-ago quarter. Also, revenues for 2017 are projected to grow 3.9% to $3.6 billion.
Factors at Play
Church & Dwight has been undertaking innovations and acquisitions to expand its footprint and market share. Going ahead, management remains optimistic to deliver solid results on the back of product innovations, brand portfolio and productivity programs. The company projects first-quarter organic sales to improve nearly in the 1–2% range. Further, it expects earnings per share to be 46 cents.
Currently, the company is witnessing solid sales at its global Consumer Products business. In fact, its sales have outpaced the Zacks Consensus Estimate in 10 of the past 11 quarters, alongside witnessing a year-over-year growth in all the four quarters of 2016.
However, Church & Dwight expects a tough business scenario in 2017 due to increasing commodity costs, higher trade promotions as well as foreign currency headwinds. Moreover, the company’s Specialty Products business has been underperforming of late. The sales at this business witnessed a year-over-year decline in all the four quarters of 2016. Nonetheless, management remains on track to revive this division’s performance to boost overall profitability.
We note that shares of Church & Dwight have rallied 11.8% outperforming the Zacks categorized Soap and Cleaning Preparations industry’s gain of 7.7% in the past six months. The industry is currently placed at top 8% of the Zacks Classified industries (20 out of 256).
Church & Dwight forms part of the Consumer Staples sector that is currently placed at bottom 38% of the Zacks Classified sectors (10 out of 16). Per the latest Earnings Preview, the earnings growth for the sector looks decent. While total earnings for the Consumer Staples sector are estimated to rise 4.3%, revenues are projected to improve 4.0%.
Stocks Poised to Beat Earnings Estimates
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:
Energizer Holdings, Inc. ENR has an Earnings ESP of +5.88% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dean Foods Company DF has an Earnings ESP of +5.88% and a Zacks Rank #3.
Post Holdings, Inc. POST has an Earnings ESP of +1.67% and a Zacks Rank #3.
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