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Things You Must Note Ahead of Molson Coors' (TAP) Q1 Earnings

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Molson Coors Beverage Company (TAP - Free Report) is expected to register top and bottom-line declines when it reports first-quarter 2021 numbers on Apr 29, before the opening bell. The Zacks Consensus Estimate for the company’s first-quarter bottom line is pegged at a loss of 12 cents per share, whereas it reported earnings of 35 cents in the year-ago quarter. The consensus mark has moved south by 5 cents in the past seven days.

For first-quarter revenues, the consensus mark is pegged at $1.86 billion, suggesting an 11.5% decline from the prior-year reported figure.

In the last reported quarter, the leading alcohol company delivered a negative earnings surprise of 47.4%. However, it delivered an earnings surprise of 40.9%, on average, over the trailing four quarters.

Key Factors to Note

In a recently provided business update, management cited that Molson Coors’ first-quarter 2021 results are expected to reflect the impacts of a system outage, stemming from the cybersecurity incident that occurred on Mar 11, and an 11-day closure of the Fort Worth, TX-based brewery because of winter storms in February. Further, the company stated that it has been on track with the restoration process and has made significant progress toward the same. Also, all its breweries have resumed production and are ramping up to near-normal levels.

However, the company noted that it has been witnessing disruptions in production and operations along with delays in shipment across the U.K., Canada and the United States. Also, the pandemic-led on-trade shutdowns in the U.K. have been concerning. In the business update, the company predicted that all these headwinds will affect its first-quarter 2021 results.

Molson Coors Beverage Company Price and EPS Surprise

 

Molson Coors Beverage Company Price and EPS Surprise

Molson Coors Beverage Company price-eps-surprise | Molson Coors Beverage Company Quote

Management expects the adverse impacts of the cybersecurity incident and winter storms in Texas to shift 1.8-2.0 million hectoliters of production and shipments from first-quarter 2021 to the rest of the year. Also, the company is expected to have witnessed a similar shift in underlying EBITDA of $120-$140 million from the first quarter to the rest of the year. Also, management forecast an additional one-time cost related to the cybersecurity issue to be recorded in the first and second quarters of 2021.

Nonetheless, the company is expected to have witnessed growth on the back of the revitalization plan, core brand strength, robust gain in the above-premium portfolio, expansion of beyond beer and increased investment in omni-channel capabilities.

Molson Coors has been benefiting from favorable net pricing, cost savings, and lower marketing, general and administrative expenses. The company’s efforts to prioritize, shift and significantly reduce marketing spend by shifting to media platforms with greater audiences in the current situation have led to cost deleverage, which is expected to have continued in the first quarter.

Additionally, Molson Coors’ focus on premiumization has been aiding its bottom-line performance. In fact, it has been committed to growing its market share through innovation and premiumization. Moreover, its innovation plans have been focused on introducing flavors and variations for customers. These efforts are expected to have contributed meaningfully to the first-quarter performance.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Molson Coors this time around. 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

Stocks With Favorable Combination

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

Energizer Holdings, Inc. (ENR - Free Report) presently has an Earnings ESP of +9.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Coty Inc. (COTY - Free Report) currently has an Earnings ESP of +350.00% and a Zacks Rank #3.

Tyson Foods, Inc. (TSN - Free Report) has an Earnings ESP of +16.03% and a Zacks Rank #3 at present.

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