McCormick & Co Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component McCormick & Co (NYSE:MKC) will unveil its latest earnings tomorrow, Thursday, January 24, 2013. McCormick & Company manufactures flavor products including spices, herbs, extracts, seasonings, flavorings, and other food products.

McCormick & Co Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of $1.14 per share, a rise of 10.7% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. For the year, analysts are projecting net income of $3.08 per share, a rise of 8.5% from last year.

Past Earnings Performance: The company topped estimates last quarter after missing forecasts the quarter prior. In the third quarter, it reported profit of 78 cents per share against a mean estimate of net income of 76 cents per share. In the second quarter, it missed forecasts by one cent.

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A Look Back: In the third quarter, profit rose 13.5% to $104.4 million (78 cents a share) from $92 million (69 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 6.2% to $977.7 million from $920.4 million.

Here’s how McCormick & Company traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

MKC

Stock Price Performance: Between October 22, 2012 and January 17, 2013, the stock price rose $4.60 (7.5%), from $61.69 to $66.29. The stock price saw one of its best stretches over the last year between June 7, 2012 and June 19, 2012, when shares rose for nine straight days, increasing 6.1% (+$3.36) over that span. It saw one of its worst periods between July 30, 2012 and August 7, 2012 when shares fell for seven straight days, dropping 2.6% (-$1.57) over that span.

Wall St. Revenue Expectations: On average, analysts predict $1.17 billion in revenue this quarter, a rise of 5.4% from the year-ago quarter. Analysts are forecasting total revenue of $4.04 billion for the year, a rise of 9.2% from last year’s revenue of $3.7 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 13.4% in the fourth quarter of the last fiscal year, 15.8% in the first quarter and 11.4% in the second quarter before increasing again in the third quarter.

There has enjoyed solid performance recently heading into this earnings announcement with profit rising by a year-over-year average of 4.6% for the last four quarters.

Analyst Ratings: There are mostly holds on the stock with eight of 13 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.35 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.3 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 4.5% to $1.22 billion while liabilities rose by 0.3% to $902.6 million.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)