Spectrum Brands' (SPB) Q3 Earnings: Disappointment In Store?
Zacks Investment Research | Jul 24, 2017 11:11PM ET
Spectrum Brands Holdings, Inc. (NYSE:SPB) is all set to report third-quarter fiscal 2017 results on Jul 27, before the opening bell.
The question lingering in investors’ minds is, whether this leading consumer products company will be able to come up with a positive earnings surprise in the to-be-reported quarter. The company’s earnings missed the Zacks Consensus Estimate by 5.6% in the fiscal second quarter. However, it has delivered an average positive earnings surprise of 0.7% in the trailing four quarters.
Let's see how things are shaping up for this announcement.
What Does the Zacks Model Unveil?
Our proven model does not conclusively show earnings beat for Spectrum Brands 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 Filter .
Spectrum Brands Holdings, Inc. Price, Consensus and EPS Surprise
Consumer Staples sector gained 2% and is currently placed at top 13% of the Zacks Classified sectors (2 out of 16).
We note that the company’s top line has lagged estimates in four of the last seven quarters, including the last reported quarter. Moreover, its sales have been declining since the last three quarters, primarily due to soft sales recorded at the Global Batteries & Appliances, Global Pet Supplies and Global Auto Care segments. In fact, sales decreased 3.3% and 0.6% in the second and first quarters of fiscal 2017, respectively. The same had slumped 4.5% in the final quarter of fiscal 2016.
Further, Spectrum Brands continues to battle adverse foreign currency effects, which is likely to mar its results in the near term. Management expects net sales for fiscal 2017 to include about 100–150 basis points impact from currency headwinds.
However, on the positive front, we remain encouraged by the company’s innovative products in all categories and persistent leverage of its global infrastructure and shared services. Also, it is making acquisitions and exiting underperforming businesses to improve profitability, margins and free cash flow. So let’s wait and see if Spectrum Brands can counter the hurdles and be able to pull off a positive earnings surprise in the upcoming quarter with these initiatives.
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:
Get The News You Want
The Clorox Company (NYSE:CLX) has an Earnings ESP of +0.67% and a Zacks Rank #2. You can see You can see the complete list of today’s Zacks #1 Rank stocks here .
Tyson Foods, Inc. (NYSE:TSN) has an Earnings ESP of +1.64% and a Zacks Rank #2.
Church & Dwight Co., Inc. (NYSE:CHD) has an Earnings ESP of +2.56% and a Zacks Rank #2.
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