One of the leading manufacturers of packaged food-products,
Mondelez International Inc.
) prepares to release its fourth-quarter 2012 results on
Wednesday, Feb 13. Let's see now, how things are shaping up for
Mondelez prior to the announcement of its fourth quarter results.
Factors to Consider this Past Quarter
Last quarter was Mondelez's first quarterly results after being
spun off from the old Kraft Foods. On Oct 1, Kraft Foods spun off
its North American grocery business into a separate independent
Kraft Foods Group Inc.
). The old Kraft Foods was renamed to Mondelez.
In the last quarter, Mondelez's earnings missed the Zacks
Consensus Estimate by 5.1% and also declined 2.6% from the
prior-year quarter hurt by weak top line, higher taxes and
currency headwinds. Revenues from both Developing Markets and
Europe fell sharply in the quarter. Softening gum demand and
lower marketing support for biscuits hurt sales in Brazil, while
market share losses in chocolates and biscuits crippled growth in
Mondelez which markets popular snacks brands like Cadbury,
Jacobs, LU, Milka, Nabisco, Oreo, Tang and Trident is still in a
transitional stage and we believe it will take some to stabilize.
Our proven model does not conclusively shows that Mondelez is
likely to beat the Zacks Consensus Estimate in the upcoming
quarter. To beat the estimate, a stock needs to have both a
positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method)
and a Zacks Rank #1, #2 or #3. However, this is not the case here
due to the following reasons:
Negative Zacks ESP: The company's Most Accurate estimate stands
at 33 cents, while the Zacks Consensus is pegged quite higher at
37 cents. This results in an Earnings ESP of -10.81%.
Zacks Rank #3 (Hold): Mondelez's Zacks Rank #3 lowers the
predictive power of ESP. Mondelez International's Zacks Rank #3
when combined with a negative ESP makes surprise prediction
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.
Management expects its top line growth for the developing market
to be below its target in the fourth quarter. For 2013 as well,
Mondelez expects its overall net organic top-line to grow at the
lower end of its long-term target marred by lower pricing and the
challenging economic conditions.
Other Stocks to Consider
Here are some other stocks from the consumer staples industry,
which you may want to consider on the basis of our model as they
have the right combination of elements to post an earnings beat
The Hershey Co
) has Earnings ESP of +0.96% and Zacks Rank #2 (Buy).
Flowers Foods Inc.
) has Earnings ESP of +5.56% and Zacks Rank #1 (Strong Buy).
FLOWERS FOODS (FLO): Free Stock Analysis
HERSHEY CO/THE (HSY): Free Stock Analysis
KRAFT FOODS GRP (KRFT): Free Stock Analysis
MONDELEZ INTL (MDLZ): Free Stock Analysis
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