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Global brewer Molson Coors Brewing Company (TAP - Analyst Report) is set to report fourth quarter 2012 results on Feb 14. Last quarter it posted a surprise of 2.24%. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Molson Coors’ third quarter earnings were positively impacted by strong sales growth, driven by improved pricing, strong performance in the U.S. region and the impact of StarBev acquisition on the operations. The StarBev acquisition in Jun 2012 significantly enhanced the company’s portfolio of premium brands. It has also created opportunities for the company in Central Europe to extend its key brands, taking advantage of the attractive beer market. In addition, Molson Coors continues to focus on its strategy of maximizing profitable growth opportunities in the core markets and expanding into new and emerging markets. The company is also undertaking restructuring initiatives to reduce overhead costs and boost profitability.

The company has delivered positive earnings surprise in the last four quarters, with an average surprise of 15.79%. Estimates are also showing an upward trend in the last two months.

However, the continued decline in volumes in three major markets of U.S., U.K. and Canada remains an overhang on the company. Increasing raw material costs and currency headwinds are also hurting the top line. Slow recovery of the U.S. economy and an unfavorable European economy are also likely to drag the company’s performance in the upcoming quarters.

Earnings Whispers?

Our proven model does not conclusively show that Molson Coors is likely to beat earnings this quarter. That is because a stock needs to have both a positive 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:  That is because the Most Accurate estimate stands at 61 cents while the Zacks Consensus Estimate is higher at 64 cents. That is a difference of -4.69%.

Zacks Rank #3 (Hold): Molson Coors’ Zacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement.

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: 

Tyson Foods Inc (TSN - Analyst Report), Earnings ESP of +6.52% and Zacks Rank #1 (Strong Buy)

Abercrombie & Fitch Co. (ANF - Analyst Report), Earnings ESP of +1.04% and Zacks Rank #1 (Strong Buy)

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

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