Diamond Foods (DMND) Q4 Earnings: What???s in the Cards?

Diamond Foods, Inc. DMND, a packaged food company, is expected to report fourth-quarter fiscal 2015 results on Sep 29. The big question facing investors now is whether the company will be able to continue with its positive earnings surprise streak in the quarter to be reported. In the trailing four quarters, Diamond Foods has outperformed the Zacks Consensus Estimate by an average of 39.7%. Also, in the preceding quarter, the company had delivered a positive earnings surprise of 43.8%. Let's see how things are shaping up for this announcement.

Zacks Model Shows Earnings Beat Unlikely

Our proven model does not conclusively show that Diamond Foods is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Diamond Foods has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 22 cents. The company carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company's ESP of 0.00% makes surprise prediction difficult.

Factors Influencing this Quarter

Though Diamond Foods is trying to reinstate itself on the growth trajectory, we cannot ignore the near-term headwinds. The company is facing challenges in procuring walnut supplies and mending its ties with growers. Moreover, a highly-leveraged balance sheet makes us skeptical of its performance. These factors may play spoilsport in the quarter to be reported.

However, the company has been trying to augment its performance by improving price realization, lowering underperforming SKUs and reducing dependence on discounts.

Stocks Poised to Beat Earnings Estimates

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:

BJ's Restaurants, Inc. BJRI has an Earnings ESP of +13.33% and a Zacks Rank #2 (Buy).

Walgreens Boots Alliance Inc. WBA has an Earnings ESP of +6.17% and a Zacks Rank #2.

Constellation Brands Inc. STZ has an Earnings ESP of +3.05% and a Zacks Rank #3.

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