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PepsiCo, Inc. (PEP - Analyst Report) is set to report its first-quarter 2013 results on Apr 18 before the market opens. In the last quarter it posted a +3.8% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

PepsiCo’s fourth-quarter results were impressive as they beat the Zacks Consensus Estimate for both revenues and earnings. We believe that the earnings beat was driven by innovation and brand investments as well as improved productivity savings in the quarter. Though earnings and revenues both declined on a year-overyear basis, organic revenues increased 5% due to impressive performance of the American foods business which is showing improving trends on the back of successful innovations and increased advertising and marketing investments. Moreover, the company provided an impressive outlook for 2013, which was in line with its long term targets and also increased its dividend rate.

2012 was a turning point for PepsiCo with increased investments in brand building, market execution and innovation, and improved productivity expected to set the foundation for further growth and competitive advantage. Overall, PepsiCo has a bright outlook for 2013. The company expects to deliver strong organic revenue growth on the back of strong growth in developing and emerging markets as well increased investments behind innovation advertising/marketing. Further cost savings and productivity gains are continued to boost earnings. However, a challenging consumer spending environment and continued sluggishness in North American beverage business could continue to hurt results.

Earnings Whispers?

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

Zacks ESP:  The Earnings ESP is 0.0%.  

Zacks #3 Rank (Hold): PepsiCo’s Zacks #3 Rank (Hold) lowers the predictive power of ESP because the Zacks #3 Rank when combined with a 0.0% ESP makes surprise prediction difficult. We caution against stocks with Zacks #4 and #5 Ranks (Sell rated stocks) going into the earnings announcement.

Other Stocks to Consider

Here are some other consumer staples 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), with Earnings ESP of +7.50% and a Zacks Rank #1 (Strong Buy)

Molson Coors Brewing Company (TAP - Analyst Report), with Earnings ESP of +2.86% and a Zacks Rank #2 (Buy)

ConAgra Foods, Inc. (CAG - Analyst Report), with an Earnings ESP of +1.70% and a Zacks Rank #2 (Buy)

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