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Will Mondelez (MDLZ) Post Q1 Earnings Beat Amid Hurdles?

Zacks Equity Research

Mondelez International, Inc. MDLZ is set to report first-quarter 2019 results on Apr 30, after market close. We note that the bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 1.8%. Let’s discuss how things are placed for the upcoming quarterly release.

Factors Likely to Impact Results

Mondelez is on track with initiatives to bolster brand capabilities. In this respect, acquisitions have played a vital role. We expect the buyout of Tate’s Bake Shop as well as partnerships with Keurig Dr Pepper and Post Consumer to yield impressive results in the to-be-reported quarter. Additionally, the company’s efforts to bolster the snacking category and digital promotional initiatives are likely support first-quarter results.

Mondelez has been undertaking some major steps to enhance productivity savings that are fueling margins and cash flow. In fact, management expects to realize savings of nearly $5 million in the first quarter. This along with higher pricing are expected to be upsides in the impending quarter.

Despite the above-mentioned encouraging aspects, Mondelez is prone to certain headwinds that might make matters sour in the upcoming quarterly announcement. We note that the company is struggling against higher raw material costs as well as rising selling, general and administrative expenses. Management predicts transportation and distribution expenses to remain high in the first quarter. Moreover, the company expects adverse currency impacts in 2019 to be a drag on the upcoming quarterly results.

Mondelez International, Inc. Price, Consensus and EPS Surprise


Mondelez International, Inc. Price, Consensus and EPS Surprise | Mondelez International, Inc. Quote


How are Estimates Faring?

The Zacks Consensus Estimate for first-quarter earnings is currently pegged at 61 cents per share, which suggests a decline of almost 1.6% from the prior-year quarter’s reported figure. The current estimate has been stable in the past 30 days.

Further, the consensus mark for revenues is pegged at $6,425 million, calling for a decline of nearly 5% from the year-ago quarter’s figure.

Zacks Model

Our proven model shows that Mondelez is likely to beat earnings estimates in the to-be-reported quarter. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mondelez’s Zacks Rank #3 combined with the Earnings ESP of +0.86% makes us reasonably confident about an earnings beat. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks Poised to Beat Earnings Estimates

Here are a few companies you may also want to consider as our model shows that they have the right combination of elements to beat earnings.

Church & Dwight CHD has an Earnings ESP of +0.30% and a Zacks Rank #2.

Inter Parfums IPAR has an Earnings ESP of +5.73% and a Zacks Rank #3.

Campbell Soup CPB has an Earnings ESP of +3.55% and a Zacks Rank #3.

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