Archer-Daniels-Midland Company ADM, one of the world’s leading food processing companies, is slated to report second-quarter 2016 results on Aug 2, before the market opens. The big question facing investors now is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, Archer Daniels missed the Zacks Consensus Estimate by an average of 7.9%. Let’s see how things are shaping up for this announcement.

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that Archer Daniels 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. Archer Daniels has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 44 cents. The company carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, its ESP of 0.00% makes surprise prediction difficult.

ARCHER DANIELS Price and EPS Surprise

ARCHER DANIELS Price and EPS Surprise | ARCHER DANIELS Quote

Factors Influencing this Quarter

Archer Daniels remains focused on enhancing its processing capabilities and global footprint through strategic acquisitions and divestitures. Further, the company’s shift from investments in domestic to international projects is likely to fuel growth and will be accretive at a faster pace. Also, Archer Daniels’ solid capital allocation and financials appear promising, and provide it with the flexibility to invest in business development as well as the scope to enhance shareholder value.

While the second quarter is expected to witness modest underlying growth, the company also anticipates incurring various startup costs over the same time frame. Also, global market presence keeps the company exposed to the risk of adverse currency movements. Estimates have been going down ahead of the company’s second-quarter earnings release. Also, it has a negative record of earnings surprises in the recent quarters.

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:

Big Lots Inc. BIG has an Earnings ESP of +4.35% and a Zacks Rank #2 (Buy).

Cabela's Incorporated CAB has an Earnings ESP of +4.92% and a Zacks Rank #2.

L Brands, Inc. LB has an Earnings ESP of +8.93% and a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
BIG LOTS INC (BIG): Free Stock Analysis Report
 
CABELAS INC (CAB): Free Stock Analysis Report
 
ARCHER DANIELS (ADM): Free Stock Analysis Report
 
L BRANDS INC (LB): Free Stock Analysis Report
 
To read this article on Zacks.com click here.