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Kraft Foods Group Inc. (KRFT - Analyst Report) is set to report fourth quarter 2012 results on Feb 15. Last quarter it posted a 16.18% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors This Past Quarter

Kraft Foods Group, reported its third quarter 2012 results, after its spun off from the old Kraft Foods. The packaged food and beverage company beat on both the top and bottom lines in its third quarter 2012 on the back of innovation, productivity improvements, volume growth, lower taxes and increased marketing investments. The fourth quarter results will be Kraft’s first earnings report as a standalone entity versus carve-out financials reported in the third quarter.

Earnings Whispers?

Our proven model does not conclusively show that Kraft Foods Group 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 #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Negative Zacks ESP: Kraft Foods Group’s currently has a negative Expected Surprise Prediction (ESP) of -10.00%.

Zacks Rank #2 (Buy): Kraft Foods’ Zacks Rank #2 (Buy) when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks #4 and #5 Ranks (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum. 

Though brand building and innovation are expected to boost consumption, the company expects revenues to be flat to down in the fourth quarter from the year-ago levels due to difficult comparisons and more product pruning. Product pruning is expected to hurt the top line by 1.5 to 2 points in the quarter. In the quarter, the company expects to record restructuring costs of $225 million.

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:  

Flowers Foods, Inc. (FLO - Snapshot Report), Earnings ESP of 5.56% and Zacks Rank #1 (Strong Buy)

J&J Snack Foods Corp. (JJSF - Snapshot Report), Earnings ESP of 5.00% and Zacks Rank #1 (Strong Buy)

Kellogg Company (K - Analyst Report), Earnings ESP of 0.97% and Zacks Rank #2 (Buy)
 

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