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Sealed Air (SEE) to Report Q3 Earnings: What's in the Cards?
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Sealed Air Corporation (SEE - Free Report) is scheduled to report third-quarter 2016 results on Oct 27, before the market opens. In the last reported quarter, the company’s adjusted earnings improved year over year and beat the Zacks Consensus Estimates. On the other hand, revenues declined year over year and lagged the Zacks Consensus Estimates. Let’s see how things are shaping up prior to this announcement.
Earnings Whispers
Our proven model does not conclusively show that Sealed Air is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Sealed Air has an Earnings ESP of -1.43%. This is because the Most Accurate estimate stands at 69 cents, lower than the Zacks Consensus Estimate of 70 cents.
Zacks Rank: Sealed Air has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
Sealed Air outpaced the Zacks Consensus Estimate in each of the trailing four quarters with an average positive surprise of 20.14%. In the last reported quarter, the company posted a positive earnings surprise of 1.56%.
Sealed Air anticipates healthier performance in the last two quarters of the year aided by enhanced demand for its core product portfolio, recently-introduced innovations and accelerated growth in the global protein market along with the eCommerce sector. Sealed Air remains confident that its momentum in North America, Europe and Asia Pacific will prevail. The company is rolling out new customers and adding to its list of strategic wins across all sectors, including facility management, retail and healthcare sectors.
Customer feedback on its robotics and Internet of Things platform has been extremely positive. Consequently, Sealed Air is augmenting its go-to-market strategy. In the second half of the year, Food Care organic sales growth is expected to improve, primarily driven by increase in sales volume in North America and Europe. Both regions will gain from higher protein productions level as well as continued adoption of advanced product.
However, the company is seeing a slowdown in the business due to political unrest in the Middle East and economic weakness in Argentina. The third quarter will experience a decline versus the second quarter as the company steps up the implementation of new sites related to recent customer wins and the significant slowdown in hospitality in Middle East, Africa.
Stocks to Consider
Here are some stocks in the industrial products sector that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Heritage-Crystal Clean, Inc has an Earnings ESP of +14.29% and also sports a Zacks Rank #1.
Ball Corporation carries a Zacks Rank #2 and has an Earnings ESP of +5.43%.
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Sealed Air (SEE) to Report Q3 Earnings: What's in the Cards?
Sealed Air Corporation (SEE - Free Report) is scheduled to report third-quarter 2016 results on Oct 27, before the market opens. In the last reported quarter, the company’s adjusted earnings improved year over year and beat the Zacks Consensus Estimates. On the other hand, revenues declined year over year and lagged the Zacks Consensus Estimates. Let’s see how things are shaping up prior to this announcement.
Earnings Whispers
Our proven model does not conclusively show that Sealed Air is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: Sealed Air has an Earnings ESP of -1.43%. This is because the Most Accurate estimate stands at 69 cents, lower than the Zacks Consensus Estimate of 70 cents.
Zacks Rank: Sealed Air has a Zacks Rank #3 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Surprise History
Sealed Air outpaced the Zacks Consensus Estimate in each of the trailing four quarters with an average positive surprise of 20.14%. In the last reported quarter, the company posted a positive earnings surprise of 1.56%.
SEALED AIR CORP Price and EPS Surprise
SEALED AIR CORP Price and EPS Surprise | SEALED AIR CORP Quote
Factors at Play
Sealed Air anticipates healthier performance in the last two quarters of the year aided by enhanced demand for its core product portfolio, recently-introduced innovations and accelerated growth in the global protein market along with the eCommerce sector. Sealed Air remains confident that its momentum in North America, Europe and Asia Pacific will prevail. The company is rolling out new customers and adding to its list of strategic wins across all sectors, including facility management, retail and healthcare sectors.
Customer feedback on its robotics and Internet of Things platform has been extremely positive. Consequently, Sealed Air is augmenting its go-to-market strategy. In the second half of the year, Food Care organic sales growth is expected to improve, primarily driven by increase in sales volume in North America and Europe. Both regions will gain from higher protein productions level as well as continued adoption of advanced product.
However, the company is seeing a slowdown in the business due to political unrest in the Middle East and economic weakness in Argentina. The third quarter will experience a decline versus the second quarter as the company steps up the implementation of new sites related to recent customer wins and the significant slowdown in hospitality in Middle East, Africa.
Stocks to Consider
Here are some stocks in the industrial products sector that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Casella Waste Systems Inc. (CWST - Free Report) has an Earnings ESP of +60.00% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Heritage-Crystal Clean, Inc has an Earnings ESP of +14.29% and also sports a Zacks Rank #1.
Ball Corporation carries a Zacks Rank #2 and has an Earnings ESP of +5.43%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>