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Fortune Brands (FBHS) to Post Q4 Earnings: What's in the Offing?

Fortune Brands Home & Security, Inc. FBHS is scheduled to report fourth-quarter 2021 results on Feb 2, after market close.

The company reported better-than-expected results in each of the trailing four quarters. Earnings surprise in the last four quarters was 14.33%, on average.  In the last reported quarter, it posted earnings of $1.49 per share, which beat the Zacks Consensus Estimate of $1.42 by 4.93%.

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In the past three months, the company has lost 10.6% compared with the industry’s decline of 8.4%.

Factors at Play

Strong momentum in Fortune Brands’ plumbing business, driven by robust demand for its brands and strong customer service, is anticipated to have augmented its Plumbing segment’s revenues in the fourth quarter. Growing popularity for the company’s value price point cabinetry products and high backlog level are likely to have boosted its Cabinets segment’s top line in the quarter. Also, strength in FBHS’ security business, coupled with healthy demand for doors and decking products, is expected to have supported its Outdoors & Security segment’s performance.

Fortune Brands’ Fiberon business, which has boosted its competencies in the outdoor living space, is anticipated to have supported its performance in the to-be-reported quarter. Also, its LARSON Manufacturing (December 2020) buyout, which has enhanced its foothold in the doors and decking space, is likely to have augmented its performance. Also, the company’s focus on operational execution, along with investments in brand-building, product innovation and digital initiatives, is likely to have been beneficial.

However, escalating costs and operating expenses have been a concern over time. Despite the company’s focus on cost-control measures, its cost of sales jumped 19% year over year while selling, general and administrative expenses increased 22% in the third quarter. It has been witnessing supply chain constraints, raw-material inflation and shortage of skilled labor, which might have affected its margins and profitability in the to-be-reported quarter.

The Zacks Consensus Estimate for the Plumbing segment's revenues is pegged at $695 million, suggesting growth of 8.9% from the year-ago reported number but a 6.2% decline sequentially. The consensus estimate for the Cabinets segment’s revenues stands at $715 million, indicating growth of 9% year over year but a fall of 0.3% from the prior quarter. The consensus mark for the Outdoors & Security segment’s revenues stands at $504 million, implying 37.3% growth from year over year but a 4.5% decline sequentially.

The consensus estimate for Fortune Brands’ fourth-quarter total revenues is currently pegged at $1,927 million, suggesting growth of 16.1% year over year and a decline of 3% sequentially. The consensus estimate for earnings of $1.30 indicates an improvement of 4% year over year but a fall of 12.8% sequentially.

Earnings Whispers

According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) to increase the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

But that is not the case here as we will see below.

Earnings ESP: Fortune Brands has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at $1.30.

Zacks Rank: The company carries a Zacks Rank #3.

Key Picks

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 this season:

FIGS Inc. FIGS has an Earnings ESP of +185.71% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for FIGS’ earnings is pegged at 2 cents per share for the fourth quarter of 2021. FIGS’ shares have lost 38.3% in the past three months.

Expedia Group, Inc. EXPE has an Earnings ESP of +4.64% and a Zacks Rank of 3, currently.

The Zacks Consensus Estimate for Expedia’s earnings is pegged at 97 cents per share for the fourth quarter of 2021. EXPE’s shares have gained 4.2% in the past three months.

CVS Health Corporation CVS has an Earnings ESP of +4.30% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for CVS’ earnings is pegged at $1.85 per share for the fourth quarter of 2021. CVS’ shares have gained 20.5% in the past three months.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Expedia Group, Inc. (EXPE): Free Stock Analysis Report
 
CVS Health Corporation (CVS): Free Stock Analysis Report
 
Fortune Brands Home & Security, Inc. (FBHS): Free Stock Analysis Report
 
FIGS, Inc. (FIGS): Free Stock Analysis Report
 
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