Things You Need to Know Before Newell's (NWL) Q3 Earnings

Newell Brands Inc. NWL is expected to witness a year-over-year decline in the top and bottom lines when it reports third-quarter 2022 earnings on Oct 28, before the opening bell.

The Zacks Consensus Estimate for third-quarter earnings is pegged at 47 cents, which suggests a decline of 13% from the year-ago quarter’s figure. The consensus mark has moved down 11.3% in the past 60 days. For quarterly revenues, the consensus mark is pegged at $2.3 billion, indicating a decline of 19% from the figure reported in the year-ago quarter.

In the last reported quarter, the Atlanta, GA-based company delivered an earnings surprise of 21.3%. Its bottom line beat the Zacks Consensus Estimate by 22.5%, on average, in the trailing four quarters.

Newell Brands Inc. Price and EPS Surprise

 

Newell Brands Inc. price-eps-surprise | Newell Brands Inc. Quote

Key Factors to Note

Newell has been reeling under continued inflationary pressure, a challenging macro environment and fewer retail orders. The company has been witnessing significant inflation in ocean freight, and source finished goods and wages, which have been weighing on consumers’ spending preferences, particularly for the lower income levels.

On its last reported quarter’s earnings call, management revised its outlook for third-quarter 2022. Sales were anticipated to be $2.21-$2.32 billion, down from the prior mentioned $2.39-$2.50 billion. Core sales were likely to decline 8-12% compared with the earlier stated 1-5% decrease. The bottom line was expected to be 46-51 cents, down from the last mentioned 50-54 cents. The normalized operating margin was forecast to be 8.7-9.4%, down from the previously communicated 10.7-11%.

However, the company has been gaining from solid demand, product innovation and robust core sales growth. Continued positive momentum in the Writing unit, driven by strength across Sharpie, Paper Mate, Expo, Rubbermaid, Ball and Rubbermaid commercial products, remained key growth drivers. Pricing efforts and stringent overhead cost management bode well.

Also, Newell has been on track to leverage its robust e-commerce capabilities, which have been performing well for some time now, owing to increased investments and better customer engagement. Some other notable efforts include buy online and pick up in stores as well as ship from store facilities in its Yankee Candle retail stores.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Newell 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Newell currently has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat.

e.l.f. Beauty ELF has an Earnings ESP of +7.58% and it currently sports a Zacks Rank of 1. The company is likely to register top-line growth when it reports third-quarter 2022 results. The consensus mark for ELF’s quarterly revenues is pegged at $105.7 million, which suggests 15.1% growth from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus mark for e.l.f. Beauty’s quarterly earnings has moved up by a penny in the past 30 days to 15 cents per share. The consensus estimate for ELF’s third-quarter earnings suggests a decline of 28.6% from the year-ago quarter’s reported figure.

Anheuser-Busch InBev BUD, alias AB InBev, currently has an Earnings ESP of +1.22% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports third-quarter 2022 results. The Zacks Consensus Estimate for quarterly earnings moved south by a penny in the last seven days to 82 cents per share. However, the consensus estimate indicates growth of 64% from the year-ago quarter's reported number.

AB InBev’s top line is expected to have risen year over year. The Zacks Consensus Estimate for BUD’s quarterly revenues is pegged at $15.2 billion, suggesting growth of 6.8% from the figure reported in the prior-year quarter. BUD has delivered an earnings beat of 2.4%, on average, in the trailing four quarters.

Kellogg's K has an Earnings ESP of +2.49% and a Zacks Rank #3 at present. K is likely to register top-line growth when it reports the third-quarter 2022 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.76 billion, which suggests growth of 3.8% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Kellogg's quarterly earnings has been unchanged in the past 30 days at 96 cents per share. However, the consensus mark suggests a decline of 11.9% from the year-ago quarter’s reported number. K has delivered an earnings surprise of 13.3%, on average, in the trailing four quarters.

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