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Monster (MNST) Q1 Earnings: Is Disappointment in the Cards?
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Monster Beverage Corporation (MNST - Free Report) is expected to release first-quarter 2017 financial numbers on May 4, after the closing bell.
In the last reported quarter, the company delivered a positive earnings surprise of 16.67%. The company surpassed the Zacks Consensus Estimate in only two of the last four quarters, with an average beat of 2.04%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Product innovation plays a huge role in the company’s success. The company regularly introduces new flavors of existing products, while removing non-performing products. Again, the company's strategic deal with The Coca-Cola Company (KO - Free Report) expanded its portfolio with notable brands with more presence in the international energy drinks market. Hence, more innovations along with distribution of its products through the Coca-Cola bottler system internationally will help the company to further boost its sales in the to-be-reported quarter.
Again, the acquisition of American Fruits and Flavors (“AFF”) proved accretive to earnings. Monster Beverage is likely to benefit further from the AFF transaction in the first quarter.
However, Monster Beverage’s sales and profits have been dented significantly by unfavorable currency translations. Though the U.S. dollar has recently softened against other currencies, the impact is still significant.
Notably, for the first quarter, the Zacks Consensus Estimate for earnings is pegged at 32 cents, reflecting a 20.9% year-over-year increase. Meanwhile, our estimate for revenues is pegged at $741.4 million, implying a 9% increase.
Earnings Whispers
Our proven model does not conclusively show that Monster Beverage is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP is -3.13% as the Most Accurate estimate of 31 cents per share is lower than the Zacks Consensus Estimate of 32 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Monster Beverage’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident of a positive earnings surprise.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Monster Beverage Corporation Price and EPS Surprise
Here are some consumer staples stocks that you may want to consider, as our model shows they have the right combination of elements to post earnings beats this quarter.
Newell Brands Inc. (NWL - Free Report) has an Earnings ESP of +6.90% and a Zacks Rank #3. The company is scheduled to report its quarterly numbers on May 8.
Dean Foods Company has an Earnings ESP of +5.88% and a Zacks Rank #3. The company is scheduled to report earnings results on May 9.
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Monster (MNST) Q1 Earnings: Is Disappointment in the Cards?
Monster Beverage Corporation (MNST - Free Report) is expected to release first-quarter 2017 financial numbers on May 4, after the closing bell.
In the last reported quarter, the company delivered a positive earnings surprise of 16.67%. The company surpassed the Zacks Consensus Estimate in only two of the last four quarters, with an average beat of 2.04%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Product innovation plays a huge role in the company’s success. The company regularly introduces new flavors of existing products, while removing non-performing products. Again, the company's strategic deal with The Coca-Cola Company (KO - Free Report) expanded its portfolio with notable brands with more presence in the international energy drinks market. Hence, more innovations along with distribution of its products through the Coca-Cola bottler system internationally will help the company to further boost its sales in the to-be-reported quarter.
Again, the acquisition of American Fruits and Flavors (“AFF”) proved accretive to earnings. Monster Beverage is likely to benefit further from the AFF transaction in the first quarter.
However, Monster Beverage’s sales and profits have been dented significantly by unfavorable currency translations. Though the U.S. dollar has recently softened against other currencies, the impact is still significant.
Notably, for the first quarter, the Zacks Consensus Estimate for earnings is pegged at 32 cents, reflecting a 20.9% year-over-year increase. Meanwhile, our estimate for revenues is pegged at $741.4 million, implying a 9% increase.
Earnings Whispers
Our proven model does not conclusively show that Monster Beverage is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: The Earnings ESP is -3.13% as the Most Accurate estimate of 31 cents per share is lower than the Zacks Consensus Estimate of 32 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Monster Beverage’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident of a positive earnings surprise.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Monster Beverage Corporation Price and EPS Surprise
Monster Beverage Corporation Price and EPS Surprise | Monster Beverage Corporation Quote
Stocks to Consider
Here are some consumer staples stocks that you may want to consider, as our model shows they have the right combination of elements to post earnings beats this quarter.
Newell Brands Inc. (NWL - Free Report) has an Earnings ESP of +6.90% and a Zacks Rank #3. The company is scheduled to report its quarterly numbers on May 8.
Dean Foods Company has an Earnings ESP of +5.88% and a Zacks Rank #3. The company is scheduled to report earnings results on May 9.
Tyson Foods, Inc. (TSN - Free Report) has an Earnings ESP of +3.77% and a Zacks Rank #2. The company is scheduled to report its quarterly numbers on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.
5 Trades Could Profit ""Big-League"" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>