Diamond Foods, Inc. (DMND - Analyst Report), a specialty food company, focused on processing, marketing and distribution of snack products and culinary ingredient and in-shell nuts, is slated to report its fourth-quarter fiscal 2014 results on Sep 25, 2014. In the last quarter, it posted a negative surprise of 31.3%. Let’s see how things are shaping up for this announcement.

Factors Influencing the Quarter

Although Diamond Foods posted lower-than-expected third-quarter fiscal 2014 results, we believe it is progressing well with its planned cost containment endeavors and operational initiatives, which has helped it to post improved top and bottom line results. Moreover, we expect the company’s future results to exhibit more sustained growth of its brands due to product innovation and differentiation as well as an improved cost structure. However, we cannot ignore the near-term headwinds such as challenges related to walnut supplies and mending ties with growers. Furthermore, we remain skeptical about the company’s performance going forward due to its highly leveraged balance sheet.

Earnings Whispers?

Our proven model does not conclusively show that Diamond Foods is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, this is not the case here, as you will see below:

Zacks ESP: ESP (Expected Surprise Prediction) for Diamond Foods is 0.00%. This is because the Most Accurate estimate stands at 13 cents per share, which is in line with the Zacks Consensus Estimate.

Zacks Rank #3 (Hold): Diamond Foods’ Zacks Rank #3 when combined with a zero ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #4 and 5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are some other companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat:

Micron Technology, Inc. (MU - Analyst Report) has an Earnings ESP of +3.70% and a Zacks Rank #2 (Buy).

Constellation Brands Inc.'s (STZ -Analyst Report) Earnings ESP stands at +1.74% and it carries a Zacks Rank #3.

Costco Wholesale Corporation (COST - Analyst Report) with an Earnings ESP of +0.66% holds a Zacks Rank #3.