Mondelez International, Inc.
) is set to report its second-quarter 2013 results on Aug 7. Last
quarter, it posted in-line results. Let's see how things are
shaping up for this announcement.
Factors to Consider this Quarter
Mondelez has been underperforming, ever since it spun
off its North American grocery business into a separate
Kraft Foods Group, Inc.
), in October last year. Last quarter, the Oreo cookies and
Cadbury chocolate maker's organic top-line growth was below its
long-term targets. Lower coffee pricing, capacity constraints in
a number of markets and continued weakness in its gum business
hurt organic-revenue growth in the quarter. Profits declined due
to higher input costs and increased advertising spending.
Management expects that the second-quarter organic growth will
be tempered again by lower coffee pricing and capacity
constraints. We do not expect any improvement in profit in this
quarter. The gum business is also expected to remain under
Mondelez's biggest competitive disadvantage is its significant
exposure to the slow growing Western European markets. We believe
that the company is still in a transitional stage and it is
likely to take some time to stabilize.
Our proven model does not conclusively show that Mondelez 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 Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Negative Zacks ESP:
Mondelez has a Zacks ESP of -2.86%.
Zacks Rank #4 (Sell):
Mondelez carries a Zacks Rank #4 (Sell). We caution against
stocks with Zacks Rank #4 and 5 (Sell-rated stocks) going into
the earnings announcement, especially when the company is seeing
negative estimate revisions momentum. Estimates have been mostly
going downwards for Mondelez over the past 60 days.
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:
), Earnings ESP of +11.86% and a Zacks #2 Rank (Buy)
), Earnings ESP of +5.66% and a Zacks #3 Rank (Hold)
KRAFT FOODS GRP (KRFT): Free Stock Analysis
MONDELEZ INTL (MDLZ): Free Stock Analysis
SANDERSON FARMS (SAFM): Free Stock Analysis
TYSON FOODS A (TSN): Free Stock Analysis
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