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Will Whirlpool (WHR) Miss Earnings?

Zacks Equity Research

Whirlpool Corp. (WHR), the largest home-appliances manufacturer in the world, is slated to post its first-quarter 2014 results on Apr 25, 2014. In the previous quarter, the company delivered a negative earnings surprise of 1%. Let’s see how things are shaping up for this announcement.

Factors This Past Quarter

Although Whirlpool’s fourth-quarter earnings missed the Zacks Consensus Estimate, it increased year over year. The year-over-year improvement was primarily driven by the company’s sustained focus on cost and capacity reduction initiatives and revenue growth.

Revenues also increased on a yearly basis surpassing the Zacks Consensus estimate, driven by increased demand for the company’s innovative products. Region-wise, revenues from North America, Latin America and Europe, Middle East and Africa grew, but those from Asia fell year over year.

Earnings Whispers?

Our proven model does not conclusively show that Whirlpool is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP (Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not the case here as you will see below.

Zacks ESP: Whirlpool currently has an Earnings ESP of -5.22%. This is because the Most Accurate estimate stands at $2.18 a share, while the Zacks Consensus Estimate is pegged at $2.30 per share.

Zacks Rank #3 (Hold): Whirlpool’s Zacks Rank #3 (Hold) when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Amazon.com Inc. (AMZN), Earnings ESP of +9.03% and a Zacks Rank #2 (Buy).

The Walt Disney Co. (DIS), Earnings ESP of +2.08% and a Zacks Rank #2 (Buy).

Big Lots Inc. (BIG), Earnings ESP of +2.27% and a Zacks Rank #3 (Hold).

Read the Full Research Report on WHR
Read the Full Research Report on AMZN
Read the Full Research Report on BIG
Read the Full Research Report on DIS


Zacks Investment Research