Kraft Announces Superb Quarterly Results

The Street vs. Tyler Smithson

Kraft Q1 Results

Actual Q1 Revenue:  $11.30 Bil

Actual Q1 EPS:  $0.49

Kraft blew away Wall Street projections today, with first-quarter revenue coming in 3.25% above consensus.  This represents a 20.5% year-over-year increase and a 2.7% quarter-over-quarter increase.  Likewise, EPS also came in above expectations with an 8.16% surprise.

Figure 1

	Actual	Tyler Smithson	Difference	The Street	Difference
Revenue	$11,318	$11,155	1.44%	$10,950	3.25%
Q1 EPS	$0.49	$0.48	2.04%	$0.45	8.16%

While Kraft’s earnings were a big surprise for Wall Street analysts covering the company, for my followers and I, results were pretty close to expectations.  As evidenced by Figure 1, I was significantly closer on both measures.  While the Street was off 3.25% on Q1 revenue, my estimates were less than have that difference—only 1.44%.  When the focus is turned to EPS, the differences become much more extreme.  Analysts were off an appalling 8.16% and I was only off a fourth of that, or 2.04%! 

Wall Street analysts should be hiding right now given their subpar predications.  It is apparent that their method of analysis employs, to a great extent, “SWAG.”  I was first introduced to this term by one of my graduate finance professors at Missouri State.  “SWAG” is an acronym for “Scientific Wild-A$$ Guess.” 

Those looking for accurate and unbiased earnings estimates, look no further than Smithson Equity Analysis.  Be sure to click the “Follow” button in the upper-right portion of your screen so you can be the first to catch all of my new posts.

I haven't decided which company I'll be analyzing next, but I'd be happy to consider any suggestions. 

 

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