Over halfway through the second-quarter earnings season, reports for 73.5% of the S&P 500 companies are already out as of Friday, Jul 29 (per the latest Zacks Earnings Trend). The outcome of the season so far has painted a modest growth picture, especially when compared to the last two quarters.

Among the 16 Zacks sectors, the Consumer Staples sector (that houses food and agriculture stocks, among others) is offering mixed signals. Per the latest report, out of 51.6% of the S&P 500 Consumer Staple stocks that have reported results so far, 81.3% beat earnings and 43.8% surpassed revenue estimates. Also, 2.2% of these companies saw their earnings improve year over year, while 1.7% recorded a slowdown in revenues.

Going forward, this sector is expected to witness a 1.4% earnings decline in Q2. While revenue is anticipated to remain flat, it marks a substantial improvement from a 5.1% drop witnessed in the preceding quarter.

Within the Consumer Staples sector, the food industry recently saw biggies like Pinnacle Foods Inc. and B&G Foods Inc. (BGS Quick QuoteBGS - Free Report) post better-than-expected earnings, backed by enhanced productivity and cost savings. However, food stocks like Pilgrim's Pride Corporation (PPC Quick QuotePPC - Free Report) and SUPERVALU Inc. posted dismal results for the recently reported quarter.

Generally, the top line of the consumer staples stocks are challenged by soft global retail and buyer demand amid evolving consumer tastes. Moreover, economic slowdown in many emerging countries has been hurting international sales and profits. Further, foreign currency headwinds continue to be a threat for some of these food firms. Nonetheless, efficient pricing, solid cost saving initiatives, lucrative acquisitions and efforts to enhance product portfolio should cushion these companies from such hurdles, in turn driving their bottom lines.

So, let’s take a look at a couple of Agriculture stocks that are queued up for earnings releases on Aug 2, 2016.

To start with Archer Daniels Midland Company (ADM Quick QuoteADM - Free Report) , we are unsure whether this food processing company will be able to post a positive earnings surprise when it reports second-quarter 2016 results. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as the company has an Earnings ESP of 0.00% and a Zacks Rank #3. Further, we note that in the trailing four quarters, the company has underperformed the Zacks Consensus Estimate by an average of 7.9%, with a negative surprise in each quarter.

However, Archer Daniels remains focused on enhancing its processing capabilities and global footprint through strategic acquisitions and divestitures. Further, the company’s shift from investments in domestic to international projects is likely to fuel growth and will be accretive at a faster pace. While the second quarter is expected to witness modest underlying growth, the company also anticipates incurring various startup costs over the same time frame. Also, global market presence keeps the company exposed to the risk of adverse currency movements. (Read more: Will Currency Woes Hurt Archer Daniels Q2 Earnings?)

Next, let’s take a sneak peek at Fresh Del Monte Produce Inc. (FDP Quick QuoteFDP - Free Report) . Its current Zacks Consensus Estimate for the second quarter of 2016 is pegged at $1.24, reflecting 3.3% growth from the year-ago period. However, our proven model does not conclusively show that Fresh Del Monte is likely to beat earnings estimates this quarter. This is because the company currently carries an Earnings ESP of 0.00% and a Zacks Rank #3. So, let’s wait and see what’s in the cards for this agriculture stock this earnings season.

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