Food Stocks' Q1 Earnings Releases On May 11: BRFS, DAR & AGRO

Over halfway through the first-quarter earnings season, reports for 412 S&P 500 companies are already out as of May 5, per the Earnings Preview. According to this report, earnings for the total S&P 500 companies are expected to improve 12.7% from the year-ago period with total revenue expected to rise 6.2%. In fact, this season has been witnessing quite impressive outcomes so far in comparison with the preceding quarters. Notably, a great number of companies have posted positive surprises, mainly on the revenues front.

Per the report, out of the 412 S&P 500 companies that have come up with their quarterly numbers, approximately 73.3% posted positive earnings surprises, while 67.7% outperformed the top-line expectations. Total earnings for these index members were up 14.2% from the year-ago quarter, while revenues also increased 7.3%.

We note that the performance of the index is not restricted to a single sector, and of the 16 Zacks sectors, three are expected to witness an earnings decline. Of these, Autos and Transportation are likely to be the major drags.

Food Stocks form part of the Consumer Staples sector. Per the report, about 75% of the S&P 500 companies in the Consumer Staples sector have reported their results, wherein 66.7% companies posted an earnings beat, while 29.2% surpassed revenue estimates. Earnings rose 4.8% year over year but revenues slipped 0.1%. However, the earnings for the sector are expected to improve 4.4% and revenues are projected to grow 4%. Currently, the Consumer Staples sector is placed at bottom 19% of the Zacks Classified sectors (13 out of 16).

So, let’s take a look at the following Food stocks that are expected to come out with results on May 11.

To start with BRF S.A. (NYSE:BRFS) , our model shows that this food company is unlikely to beat estimates in first-quarter 2017. 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. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

BRF has an ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are currently pegged at a loss of 12 cents. Moreover, the company carries a Zacks Rank #5 (Strong Sell). Note that 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.

We note that the Zacks Consensus Estimate of a loss of 12 cents has widened by 2 cents in the past 30 days.

Next, let’s see what’s in store for Darling Ingredients Inc. (NYSE:DAR) , which is slated to report first-quarter 2017 results, after the closing bell. The company’s earnings have lagged the Zacks Consensus Estimate in two of the trailing four quarters, posting an average miss of 20.9%.

Darling Ingredients has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are currently pegged at 7 cents. However, the company carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. Though a favorable Zacks Rank increases the predictive power but an ESP of 0.00% makes surprise prediction difficult. Further, we note estimates have been stable in the past 30 days.

Lastly, Adecoagro S.A. (NYSE:AGRO) , which is expected to report first-quarter 2017 results, had posted negative earnings surprise of 81.8% in the last quarter.

Adecoagro has an Earnings ESP of 0.00% with both the Most Accurate estimate and the Zacks Consensus Estimate pegged at 21 cents. The company carries a Zacks Rank #2, which increases the predictive power of ESP. However, ESP of 0.00% makes surprise prediction difficult.

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