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Factors Likely to Decide Newell's (NWL) Fate in Q2 Earnings
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Newell Brands Inc. (NWL - Free Report) is slated to report second-quarter 2020 results on Jul 31, before the opening bell. Although the Zacks Consensus Estimate for second-quarter earnings has increased 2 cents to 15 cents over the past 30 days, the same suggests a plunge of 66.7% from the year-ago quarter’s tally. Further, the consensus mark for quarterly revenues is pegged at $1,959 million, indicating 7.4% decline from the figure reported in the year-ago quarter.
However, the Atlanta, GA-based company’s earnings have outperformed the Zacks Consensus Estimate in the trailing four quarters by an average surprise of 28.3%.
Key Factors to Note
Newell has been witnessing lower core sales for a while. Further, we expect COVID-19 to have a profound impact on its second-quarter performance. Management at its first-quarter earnings call on May 1 said that retail store closures and supply chain disruptions will hurt its second-quarter results. We note that any softness in Writing, Home Fragrance, and Outdoor & Recreation categories are likely to show on the company's quarterly performance.
Also, the company projects that significant revenue decline in the soon-to-be-reported quarter is likely to put pressure on operating margin owing to deleveraged fixed cost in spite of the company’s cost-containment efforts. Adverse foreign currency translations remain added deterrents.
However, the company’s Food and Commercial segment has been benefiting as consumer preference has shifted to certain products. This, along with a positive sales trend in the Appliances & Cookware business in the United States, might have aided second-quarter results. Meanwhile, Newell’s FUEL initiative to boost productivity and e-commerce-enhancing efforts look encouraging. These positives might have cushioned the quarter to some extent.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Newell this reporting cycle. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Clorox (CLX - Free Report) presently has an Earnings ESP of +0.59% and a Zacks Rank #2.
Kellogg (K - Free Report) presently has an Earnings ESP of +1.23% and a Zacks Rank #3.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Factors Likely to Decide Newell's (NWL) Fate in Q2 Earnings
Newell Brands Inc. (NWL - Free Report) is slated to report second-quarter 2020 results on Jul 31, before the opening bell. Although the Zacks Consensus Estimate for second-quarter earnings has increased 2 cents to 15 cents over the past 30 days, the same suggests a plunge of 66.7% from the year-ago quarter’s tally. Further, the consensus mark for quarterly revenues is pegged at $1,959 million, indicating 7.4% decline from the figure reported in the year-ago quarter.
However, the Atlanta, GA-based company’s earnings have outperformed the Zacks Consensus Estimate in the trailing four quarters by an average surprise of 28.3%.
Key Factors to Note
Newell has been witnessing lower core sales for a while. Further, we expect COVID-19 to have a profound impact on its second-quarter performance. Management at its first-quarter earnings call on May 1 said that retail store closures and supply chain disruptions will hurt its second-quarter results. We note that any softness in Writing, Home Fragrance, and Outdoor & Recreation categories are likely to show on the company's quarterly performance.
Also, the company projects that significant revenue decline in the soon-to-be-reported quarter is likely to put pressure on operating margin owing to deleveraged fixed cost in spite of the company’s cost-containment efforts. Adverse foreign currency translations remain added deterrents.
However, the company’s Food and Commercial segment has been benefiting as consumer preference has shifted to certain products. This, along with a positive sales trend in the Appliances & Cookware business in the United States, might have aided second-quarter results. Meanwhile, Newell’s FUEL initiative to boost productivity and e-commerce-enhancing efforts look encouraging. These positives might have cushioned the quarter to some extent.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Newell this reporting cycle. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Newell Brands Inc. Price and EPS Surprise
Newell Brands Inc. price-eps-surprise | Newell Brands Inc. Quote
Newell carries a Zacks Rank #3 and an Earnings ESP of +0.31%.
More Stocks With Favorable Combinations
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:
Sprouts Farmers Market (SFM - Free Report) currently has an Earnings ESP of +2.63% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Clorox (CLX - Free Report) presently has an Earnings ESP of +0.59% and a Zacks Rank #2.
Kellogg (K - Free Report) presently has an Earnings ESP of +1.23% and a Zacks Rank #3.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>