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Factors Setting the Tone for Mondelez's (MDLZ) Q4 Earnings

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Mondelez International, Inc. MDLZ is set to release fourth-quarter 2019 results on Jan 29, after market close. Further, the company has trailing four-quarter positive earnings surprise of 2.9%, on average. Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Mondelez International, Inc. Price and EPS Surprise


Well-chalked endeavors such as innovations under the SnackFutures platform, efforts to broaden good-for-you offerings, brand building through promotions and strategic buyouts have been driving Mondelez’s top line. Also, strategic pricing efforts have been fueling the company’s organic sales. Moreover, Mondelez’s saving efforts bode well.

Notably, the company in its last earnings call guided organic net revenue growth of more than 3.5% for 2019. However, the growth rate in the fourth quarter is likely to have been lower than the trailing three quarters due to the absence of the extended Easter season.

However, Mondelez has been struggling with higher labor and logistics costs. Further, it has been witnessing margin pressure in Brazil, thanks to hurdles in plant transition along with weakness in powder beverage category. Also, the impact of adverse currency fluctuation cannot be ignored. Evidently, Mondelez’s bottom line is likely to have been impacted by currency woes to the tune of 14 cents in 2019. On a currency-neutral basis, earnings per share growth is projected in the range of 5-7%.

Estimates for Q4 & 2019

The Zacks Consensus Estimate for fourth-quarter 2019 earnings is pegged at 60 cents per share, which suggests a decline of 4.8% from the year-ago quarter’s reported figure. The projection has remained unchanged in the past 30 days. The consensus mark for revenues is pegged at $6,843 million, which indicates an increase of 1% from the prior-year quarter’s figure.

For 2019, the Zacks Consensus Estimate is pegged at $2.47 per share that suggests an improvement of 1.7% from the year-ago figure. The consensus mark for 2019 sales is pegged at $25,771 million.

What the Zacks Model Unveils?

Our proven model doesn’t conclusively predict an earnings beat for Mondelez 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.

Mondelez carries a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combinations

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:

Darling Ingredients DAR presently has an Earnings ESP of +6.38% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hostess Brands, Inc. TWNK presently has an Earnings ESP of +4.62% and a Zacks Rank #1.

Procter & Gamble (PG - Free Report) currently has an Earnings ESP of +2.19% and a Zacks Rank #2.

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