The Scotts Miracle-Gro Company (SMG Free Report) is expected to release results for the fourth quarter of fiscal 2021 on November 3, before the opening bell. Its fourth quarter tax results should reflect the strength of Hawthorne’s business and higher costs.

ScottsMiracle-Gro has beaten Zacks’ consensus estimate for earnings in three of the past four quarters, while missing the same once. The company has a surprise profit for the last four quarters of 38.8% on average. The company posted a surprise profit of 13.7% in the last published quarter.

ScottsMiracle-Gro shares are down 4.4% in the past year, compared to the industry’s 64.3% increase.

Image source: Zacks Investment Research

Let’s see how things went for this announcement.

What do the estimates indicate?

Zacks’ consensus estimate for fiscal fourth quarter revenue is currently set at $ 716 million, which indicates a decline of 19.5% from the level in the previous year quarter.

Zacks’ consensus estimate for fourth-quarter tax sales for the U.S. consumer segment is currently set at $ 276 million, which implies a 44.5% decline from the figure released a year ago.

Zacks’ consensus estimate for the fourth quarter fiscal sales of the Hawthorne segment is currently set at $ 399 million, which indicates a 13.3% increase from the figure released a year ago.

Factors in play

Hawthorne’s fourth quarter performance is expected to have benefited from strong growth across all product categories, particularly hydroponic lighting in North America. It is also likely to have benefited from the cost savings during the quarter.

However, the company is expected to have been affected by high marketing expenses during the quarter. High raw material costs may also have put pressure on margins.

He has also witnessed headwinds in the US Consumer division, which is likely to hurt the company’s results.

Zack model

Our proven model does not conclusively predict increased profits for ScottsMiracle-Gro this time around. The combination of a positive earnings ESP and a Zacks # 1 (strong buy), 2 (buy) or 3 (hold) ranking increases the odds of beating the winnings. But it is not the case here.

ESP on income: ESP payouts for ScottsMiracle-Gro are 0.00%. Zacks’ consensus estimate is currently pegged at a loss of 85 cents. You can discover the best stocks to buy or sell before they are flagged with our ESP Earnings Filter.

Zack Rank: ScottsMiracle-Gro currently wears a Zacks Rank # 4 (Sell).

Actions worth a look

Here are a few companies in the basic materials sector that you might want to consider, as our model shows they have the right mix of elements to show superior profit this quarter:

B2 Gold Corp. (BTG Free Report), which is scheduled to release on November 2, has an ESP on earnings of + 0.53% and carries Zacks rank 3. You can see The full list of today’s Zacks # 1 Rank stocks here.

The Chemours Company (CC Free Report), which is scheduled to release on November 4, has an ESP on earnings of + 1.26% and carries the Zacks # 2 rank.

Albemarle Company (ALB Free Report), which is due to release on November 3, has an ESP on earnings of + 8.73% and carries Zacks rank 3.