Kellogg (K) to Report Q2 Earnings: Is a Beat in the Cards?
Kellogg Company K is slated to release second-quarter 2020 results on Jul 30. This renowned ready-to-eat cereals and convenience food products company delivered an earnings surprise of 5.3% in the last reported quarter. Further, Kellogg has a trailing four-quarter earnings surprise of 8.3%, on average.
The Zacks Consensus Estimate for second-quarter earnings has remained stable at 93 cents per share over the past 30 days. This suggests a decline of 6.1% from the figure reported in the year-ago period. The consensus mark for revenues stands at $3,252 million, indicating a drop of 6.1% from the year-ago period’s reported figure.
Kellogg Company Price and EPS Surprise
Kellogg Company price-eps-surprise | Kellogg Company Quote
Key Factors to Note
Kellogg has been benefiting from burgeoning demand for packaged food amid the coronavirus-led increased at-home consumption. Also, the company has been gaining from its prudent buyouts, which have solidified its brand portfolio. Moreover, Kellogg is on track with its Deploy for Growth strategy and accordingly making efforts to restructure the portfolio. As part of portfolio restructuring efforts, the company completed the sale of certain snacks, cookies, crusts and ice cream businesses in July 2019, which however is likely to have affected Kellogg’s adjusted operating profit in the quarter under review. Also, foreign currency headwinds are likely to have hurt performance.
Apart from this, Kellogg has been struggling with rising input costs. Also, in its last earnings call, management noted that the company had been incurring elevated costs related to operations amid the pandemic. These include investments in employee safety and increased cleaning and sanitization measures. Further, Kellogg has been making investments in information technology to support remote working. These along with higher production and logistic costs are likely to have exerted some pressure on margins.
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 currently has a Zacks Rank #3 and an Earnings ESP of +1.23%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks With Favorable Combinations
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.
Nu Skin NUS has an Earnings ESP of +6.35% and a Zacks Rank #1.
Flowers Foods FLO has an Earnings ESP of +9.41% and a Zacks Rank #2.
Clorox CLX has an Earnings ESP of +0.59% and a Zacks Rank #2.
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Kellogg Company (K) : Free Stock Analysis Report
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