Molson Coors Brewing Company
) is set to report fourth quarter 2012 results on Feb 14. Last
quarter it posted a surprise of 2.24%. Let's see how things are
shaping up for this announcement.
Growth Factors this Past Quarter
Molson Coors' third quarter earnings were positively impacted
by strong sales growth, driven by improved pricing, strong
performance in the U.S. region and the impact of StarBev
acquisition on the operations. The StarBev acquisition in Jun
2012 significantly enhanced the company's portfolio of premium
brands. It has also created opportunities for the company in
Central Europe to extend its key brands, taking advantage of the
attractive beer market. In addition, Molson Coors continues to
focus on its strategy of maximizing profitable growth
opportunities in the core markets and expanding into new and
emerging markets. The company is also undertaking restructuring
initiatives to reduce overhead costs and boost profitability.
The company has delivered positive earnings surprise in the
last four quarters, with an average surprise of 15.79%. Estimates
are also showing an upward trend in the last two months.
However, the continued decline in volumes in three major
markets of U.S., U.K. and Canada remains an overhang on the
company. Increasing raw material costs and currency headwinds are
also hurting the top line. Slow recovery of the U.S. economy and
an unfavorable European economy are also likely to drag the
company's performance in the upcoming quarters.
Our proven model does not conclusively show that Molson Coors
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Negative Zacks ESP:
That is because the Most Accurate estimate stands at 61
cents while the Zacks Consensus Estimate is higher at 64 cents.
That is a difference of -4.69%.
Zacks Rank #3 (Hold):
Molson Coors' Zacks Rank #3 (Hold) lowers the predictive power of
ESP because the Zacks Rank #3 when combined with a negative ESP
makes surprise prediction difficult. We caution against stocks
with Zacks Ranks #4 and #5 (Sell rated stocks) going into the
Other Stocks to Consider
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 this quarter:
Tyson Foods Inc
), Earnings ESP of +6.52% and Zacks Rank #1 (Strong Buy)
Abercrombie & Fitch Co.
), Earnings ESP of +1.04% and Zacks Rank #1 (Strong Buy)
), Earnings ESP of +0.97% and Zacks Rank #2 (Buy)
ABERCROMBIE (ANF): Free Stock Analysis Report
KELLOGG CO (K): Free Stock Analysis Report
MOLSON COORS-B (TAP): Free Stock Analysis
TYSON FOODS A (TSN): Free Stock Analysis
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