Factors Setting the Stage for Kellogg's (K) Q1 Earnings
Kellogg Company K is scheduled to release first-quarter 2020 results on Apr 30. This renowned convenience food provider has a trailing four-quarter positive earnings surprise of 8.5%, on average.
The Zacks Consensus Estimate for first-quarter 2020 earnings is pegged at 93 cents per share, which suggests a decline of 7.9% from the year-ago quarter’s reported figure. Nevertheless, the projection has moved up by a couple of cents in the past 7 days. The consensus mark for revenues is pegged at $3.3 billion, which indicates a decline of 5.9% from the prior-year quarter’s figure.
Kellogg Company Price and EPS Surprise
Kellogg Company price-eps-surprise | Kellogg Company Quote
Factors at Play
Kellogg has been undertaking efforts to restructure its portfolio. In this regard, the company completed the sale of its cookies, fruit snacks, pie crust and ice cream cones businesses in July 2019. However, the divestiture has been hurting the company’s top line. During the last earnings call, management stated that it expects high seasonality in its business during the first quarter. Apart from these, the company has been struggling with higher input costs. Also, volatile currency movement is a concern.
Nevertheless, Kellogg’s strategic buyouts have been aiding its top line. In this regard, investment in Nigeria-based food distributor — Multipro — is yielding. Also, the top line has been benefiting from the acquisition of renowned nutrition bar brand, RXBAR (completed in 2017). The acquisition of Pringles brand has been lucrative. Further, Kellogg’s focus to augment its portfolio through product launches, innovation and marketing initiatives bodes well. Also, the company has been investing in brand-building initiatives.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Kellogg this time 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kellogg carries a Zacks Rank #3 and an Earnings ESP of +3.23%.
Other Stocks WithFavorable Combination
Here are some other companies that you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat.
The J. M. Smucker Company SJM currently has an Earnings ESP of +1.66% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Campbell Soup Company CPB currently has an Earnings ESP of +21.06% and a Zacks Rank #2.
Church & Dwight Co., Inc. CHD currently has an Earnings ESP of +3.56% and a Zacks Rank of 2.
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