Mead Johnson Nutrition Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Mead Johnson Nutrition (NYSE:MJN) will unveil its latest earnings tomorrow, Thursday, January 31, 2013. Mead Johnson Nutrition provides pediatric nutrition and related products which help improve the health and development of infants and children around the world.

Mead Johnson Nutrition Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 68 cents per share, a rise of 30.8% 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. Analysts are projecting profit to rise by 9% versus last year to $3.04.

Past Earnings Performance: Last quarter, the company missed estimates by one cent, coming in at profit of 71 cents per share versus a mean estimate of net income of 72 cents per share. In the first quarter, the company beat estimates by 6 cents.

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A Look Back: In the second quarter, profit rose 25.5% to $165.8 million (81 cents a share) from $132.1 million (64 cents a share) the year earlier, but fell short analyst expectations. Revenue rose 8.6% to $1.01 billion from $932 million.

Here’s how Mead Johnson Nutrition traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

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Stock Price Performance: Between October 29, 2012 and January 25, 2013, the stock price rose $7.99 (12.9%), from $62 to $69.99. The stock price saw one of its best stretches over the last year between January 17, 2013 and January 25, 2013, when shares rose for six straight days, increasing 5.2% (+$3.47) over that span. It saw one of its worst periods between October 4, 2012 and October 12, 2012 when shares fell for seven straight days, dropping 2.8% (-$2.04) over that span.

Wall St. Revenue Expectations: Analysts are projecting a rise of 4.9% in revenue from the year-earlier quarter to $956.3 million.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 15.3% in the third quarter of the last fiscal year, 13.4% in the fourth quarter of the last fiscal year and 9.6% in the first quarter before increasing again in the second quarter.

Analyst Ratings: With six analysts rating the stock as a buy, none rating it as a sell and six rating it as a hold, there are indications of a bullish outlook.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.6 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 1.56 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 3.8% to $1.83 billion while liabilities rose by 1.5% to $1.14 billion.

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