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Mondelez (MDLZ) Queued for Q3 Earnings: What's in the Offing?

Mondelez International, Inc. MDLZ is likely to register an improvement in the top line when it reports third-quarter 2020 numbers on Nov 2. The Zacks Consensus Estimate for revenues is pegged at $6.49 billion, which indicates an increase of 2.2% from the prior-year quarter’s reported figure.

However, the company’s bottom line is expected to decline year over year. The Zacks Consensus Estimate for third-quarter earnings has been unchanged at 63 cents per share over the past 30 days. The estimate suggests a decline of 1.6% from the year-ago quarter’s reported figure. Notably, the company has a trailing four-quarter earnings surprise of 6.3%, on average. In the last reported quarter, it delivered an earnings surprise of 12.5%.

Mondelez International, Inc. Price and EPS Surprise

Mondelez International, Inc. Price and EPS Surprise

Mondelez International, Inc. price-eps-surprise | Mondelez International, Inc. Quote

Key Factors to Note

Mondelez is witnessing a spike in demand primarily in the developed markets owing to higher at-home consumption amid the coronavirus outbreak. However, the impact of sluggish demand from emerging markets amid the pandemic as well as adverse currency fluctuations cannot be ignored.

Apart from this, Mondelez is struggling with escalated coronavirus-induced expenses and higher raw material costs. Notably, such factors put pressure on adjusted gross profit margin that contracted 90 basis points in the second quarter. Nonetheless, the company is on track with its cost saving efforts. Also, strategic pricing efforts have been fueling the company’s organic sales for a while now. Further, well-chalked endeavors such as product innovations, brand building through promotions as well as buyouts bodes well.

What the Zacks Model Unveils

Our proven model does not predict an earnings beat for Mondelez this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Mondelez has a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are some companies that you may want to consider as our model shows that these also have the right combination of elements to post an earnings beat.

Church & Dwight CHD has an Earnings ESP of +1.80% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Hershey Company HSY currently has an Earnings ESP of +1.63% and a Zacks Rank #3.

Medifast MED currently has an Earnings ESP of +1.54% and a Zacks Rank of 3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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