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Earnings Preview: CPO, K, SLE, YUM

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February 1, 2010
By Momei Qu - Contributor, Stock Traders Daily

(La Jolla, CA) This week we take a look at 4Q predictions for various food companies across the whole value chain, from ingredients to packaged foods to freshly prepared foods. We begin Tuesday with earnings announcement from Corn Products International, a leader in manufacturing corn-based ingredients such as syrups, starches, and oil. Later in the week we hear from packaged food giants Kellogg and Sara Lee, along with Yum! Brands, owner of fast-food joints KFC, Taco Bell, and Pizza Hut.

Wall Street analysts are expecting Corn Products International (NYSE: CPO) to report earnings per share of $0.67 on revenues of $860 million. As a major supplier of ingredients and condiments, Corn Products was hurt by lower sweetener and starch prices, which experienced almost double digit drops at year end. However, sales (mostly held up by the Mexican market) were high enough for analysts to believe the company will stay out of the red for this quarter. Shares of CPO closed $28.42 Friday. For more information on investing in Corn Products, download our free CPO trading report.

YUM! Brands (NYSE: YUM), scheduled to announce earnings Wednesday, is expected earn $0.23 per share on revenues of $3.1 billion. Sales in the U.S. have been slow, but double-digit growth in China will elevate overall revenues. To combat the sluggish results in the U.S., Pizza Hut has rolled out a new offer for the price conscious consumer: $10 for any size pizza and crust, plus up to 5 toppings. Will this deal appeal to consumers and bump up YUM! Brands’ stagnant share price? Take a look at our free YUM trading report to find out. Shares of YUM closed $34.21 Friday.

On Thursday we will hear from Kellogg (NYSE: K) on their quarterly results. Analysts are predicting earnings per share of $0.48 and revenues of $2.9 billion. Improved results from cereal sales and efforts by the company to reduce costs will both help the company’s bottom line. Analysts caution, however, that input costs will likely rise over the next few months while consumer spending remains uncertain. How will that affect Kellogg’s share price? Download our free K trading report to learn more. Shares of K is trading near its 52 week high of $55.45, closing at $54.42 Friday.

Also reporting Thursday is Sara Lee (NYSE: SLE), estimated to earn $0.23 per share and $3.1 billion in revenues. Results are driven in part by continuing success in its retail meat segment. This quarter saw growth in revenues from both breakfast and lunch meat, where it’s continuing to gain market share. Earnings also got a boost from the sale of its International Household and Body Care (IHBC) division late last year to P&G for $472 million. The use of these proceeds is yet to be determined, and will likely have an effect on 2010 results. To learn more about how Sara Lee is projected to perform in 2010, read our free SLE trading report. Shares of SLE closed $12.14 Friday.

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