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Here's How Kraft Heinz (KHC) Looks Ahead of Q3 Earnings

Zacks Equity Research

The Kraft Heinz Company KHC is scheduled to release third-quarter 2019 results on Oct 31. This packaged food and beverage company delivered a positive earnings surprise of 4% in the last reported quarter.

Let’s see what’s in store for the company this time around.

What to Expect?

The Zacks Consensus Estimate for third-quarter earnings has been stable over the past 30 days at 53 cents, which suggests a slump of 32.1% from the year-ago period’s reported figure. The consensus mark for revenues is $6,096 million, indicating a drop of more than 4% from the figure reported in the year-ago quarter.

The Kraft Heinz Company Price and EPS Surprise

Factors at Play

Kraft Heinz is likely to have benefited from focus on innovation, product development and other efforts to enhance the performance of its brands. Also, marketing and distribution initiatives are likely to have yielded favorable results for the company in the third quarter. Additionally, efforts to improve pricing might have aided the company.

However, inventory reductions by retailers in the United States and Canada are likely to show on the company’s organic sales as well as overall performance. Also, volatile currency movements have been a concern for Kraft Heinz’s top and bottom lines.

Furthermore, Kraft Heinz’s bottom line is expected to reflect the impacts of escalated key commodity costs in the quarter to be reported. Moreover, increased fixed cost investments and elevated supply-chain costs (packaging, freight and more) most likely continued being threats. Also, in its last earnings call, management guided a high effective tax rate for the third quarter, which is likely to have weighed on the bottom line.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Kraft Heinz 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. But that’s not the case here.

Although Kraft Heinz has an Earnings ESP of +4.76%, it carries a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combination

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:

Church & Dwight CHD has an Earnings ESP of +0.22% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tyson Foods TSN has an Earnings ESP of +1.90% and a Zacks Rank #2.

Hormel Foods HRL has an Earnings ESP of +0.71% and a Zacks Rank #3.

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Click to get this free report Hormel Foods Corporation (HRL) : Free Stock Analysis Report Tyson Foods, Inc. (TSN) : Free Stock Analysis Report The Kraft Heinz Company (KHC) : Free Stock Analysis Report Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research