Kraft Foods Group
) is set to report its first-quarter fiscal 2013 results on May 2
after the market closes. Last quarter, it posted a 90% positive
surprise. Let's see how things are shaping up for this
Kraft Foods Group was spun off from Kraft Foods, Inc into an
independent company last year in October. Kraft Foods Group
includes the North American grocery business of the old Kraft
Foods which has been renamed to
), but now comprises only its global snacks business.
Factors to Consider This Quarter
The top line was quite weak in the fourth quarter due to the
difficult year-ago comparisons and volume declines (due to
retailer inventory shifts and more product pruning). Kraft Foods
was not much successful in raising prices either.
Management is not too bullish for the first quarter of 2013 as
well given the difficult year-ago comparison which included some
price increases that are not expected to be repeated in this
quarter. Moreover, management does not expect a full recovery
from the consumption declines seen in the fourth quarter of
However, like the fourth quarter of 2012, the first quarter's
profits could see tailwinds from strong productivity gains and
cost savings which can partially offset headwinds from the
sluggish top line.
Our proven model does not conclusively show that Kraft Foods
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here, as you will see below.
The Zacks ESP is 0.0%.
Zacks Rank #2 (Buy):
Kraft Foods carries a Zacks Rank#2 (Buy). However the Zacks #2
Rank when combined with a 0.0% ESP makes surprise prediction
difficult. We caution against stocks with Zacks #4 and #5 Ranks
(Sell-rated stocks) going into the earnings announcement.
Other Stocks to Consider
Here are some other food companies you may want to consider,
as our model shows they have the right combination of elements to
post an earnings beat this quarter:
Flower Foods Inc.
), with Earnings ESP of +14.63% and a Zacks Rank #1 (Strong
J&J Snack Foods Corp
), with Earnings ESP of +9.84% and a Zacks Rank #2 (Buy).
FLOWERS FOODS (FLO): Free Stock Analysis
J&J SNACK FOODS (JJSF): Free Stock Analysis
KRAFT FOODS GRP (KRFT): Free Stock Analysis
MONDELEZ INTL (MDLZ): Free Stock Analysis
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