Lamb Weston Reports In-Line Earnings, Revenue Beats Expectations

Lamb Weston reported quarterly earnings of $0.73 per share, aligning with the consensus estimate but down from $1.63 a year ago. While revenues surpassed expectations at $1.65 billion, the company's future growth outlook appears constrained due to unfavorable earnings revisions.

Date: 02-10-2024

AI Rating: 4

Lamb Weston (LW) recently reported its quarterly earnings, posting an Earnings Per Share (EPS) of $0.73. This result matches the consensus estimate but represents a significant decline from the $1.63 EPS reported in the same quarter last year. Such a drop indicates potential challenges for the company moving forward.

The revenue for the quarter was reported at $1.65 billion, exceeding the Zacks Consensus Estimate by 6.36%, although this also shows a decrease from the prior year's revenues of $1.67 billion. Lamb Weston has managed to surpass revenue estimates twice in the last four quarters, which may provide some reassurance to investors.

However, the report also indicates the company's difficulty in achieving earnings expectations. It had a negative surprise of -37.10% in the previous quarter, with only one EPS consensus estimate being exceeded in the last four quarters. This underperformance is likely to create concern among investors, as consistent failure to meet expectations can lead to a decline in investor confidence.

The current consensus EPS estimate for the next quarter is $1.20, with revenues expected at $1.67 billion. While the future estimates could change, the existing unfavorable trend in earnings revisions has translated to a Zacks Rank of #5 (Strong Sell) for the stock, signaling expectations of further underperformance compared to the market in the near future.

Additionally, Lamb Weston’s shares have declined about 40.1% since the start of the year, contrasting sharply with the S&P 500's gain of 20.8%. Such underperformance could deter potential investors and negatively impact stock prices further.

Stocks: LW CL