Landec (LNDC) reports Q2 loss, misses revenue estimates

Landec (LNDC) came out with a quarterly loss of $0.25 per share versus the Zacks Consensus Estimate of a loss of $0.08. That compares with a profit of $0.02 per share a year ago. The figure is adjusted for one-time items.

This quarterly report represents an earnings surprise of -212.50%. A quarter ago, it was expected that this agricultural and food packaging company would post a loss of $0.11 per share when it actually produced a loss of $0.23, representing a surprise of -109.09%.

Over the last four quarters, the company has beaten consensus earnings per share estimates only once.

Landec, which belongs to the Zacks Food – Miscellaneous industry, posted revenues of $129.49 million for the quarter ended November 2021, missing the Zacks Consensus Estimate by 2.16%. This compares to the prior-year revenues of $130.9 million. The company has topped the consensus revenue estimate two times over the last four quarters.

The sustainability of current share price movements based on recently released data and future earnings expectations will depend primarily on management’s commentary following the earnings conference call.

Landec shares have lost about 1.3% since the beginning of the year, while the S&P 500 has gained 0.6%.

What’s next for Landec?

Even though Landec has underperformed the market this year, investors are wondering: what’s next for this stock?

There are no easy answers to this key question, but one reliable indicator that can help investors address this is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revision trend for Landec is mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. As such, the stock is expected to perform in line with the market in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the upcoming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is $0.03 on $141.6 million in revenue for the coming quarter and -$0.19 on $546.31 million in revenue for the current fiscal year.

Investors should be aware that the outlook for the industry can also have a significant impact on stock performance. In terms of the Zacks Industry Rank, Food – Miscellaneous currently ranks in the bottom 14% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another company in the same industry, Conagra Brands (CAG), has not yet released its earnings for the quarter ended November 2021. The results are expected to be released on January 6.

The company is expected to report quarterly earnings of $0.68 per share in its upcoming report, which would represent a year-over-year change of -16.1%. The consensus earnings per share estimate for the quarter has been revised down by 0.3% over the past 30 days to the current level.

Conagra Brands revenue is expected to be $3.06 billion, up 2.1% from the year-ago quarter.

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