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What's in the Offing for Mondelez's (MDLZ) Q2 Earnings?

Zacks Equity Research

Mondelez International, Inc. MDLZ is set to release second-quarter 2019 results on Jul 30, after market close. We note that the company’s bottom line surpassed the Zacks Consensus Estimate in the trailing four quarters, the average being 3%. Let’s discuss how things are placed ahead of the upcoming quarterly release.

Factors Likely to Impact Results

Mondelez is progressing well with brand-enhancement efforts. In this context, 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 continue yielding impressive results in the to-be-reported quarter.  Additionally, efforts to bolster the snacking category through innovations under the SnackFutures platform and endeavors to broaden good-for-you offerings look encouraging. Further, the company’s promotional initiatives and consistent efforts to widen e-commerce presence are likely to support second-quarter performance.

Mondelez has also been undertaking efforts to enhance productivity savings that are fueling margins and cash flow. This along with higher pricing are expected to be upsides in the impending quarter.

Despite these upsides, Mondelez is prone to certain headwinds. It is struggling against higher raw material costs as well as increase in selling, general and administrative expenses. Such rises are likely dent the company’s bottom-line performance. Moreover, the impact of any adverse currency fluctuation on quarterly results cannot be counted out completely. The same factor hurt first-quarter 2019 results by almost 7.4 percentage points.

Mondelez International, Inc. Price, Consensus and EPS Surprise


Mondelez International, Inc. Price, Consensus and EPS Surprise

Mondelez International, Inc. price-consensus-eps-surprise-chart | Mondelez International, Inc. Quote


Which Way are Estimates Treading?

The Zacks Consensus Estimate for second-quarter revenues is pegged at $5,970 million, which indicates a decline of nearly 2.3% from the year-ago quarter’s reported figure.

Further, the consensus mark for earnings is currently pegged at 57 cents per share, which suggests an improvement of almost 1.8% from the prior-year quarter’s figure. The estimate has been stable in the past 30 days.

Zacks Model

Our proven model shows that Mondelez is not 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.

Although Mondelez carries a Zacks Rank #2, its Earnings ESP of -1.75% makes surprise prediction difficult. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter

Stocks Poised to Beat Earnings Estimates

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

Church & Dwight Co., Inc CHD has an Earnings ESP of +1.22% and a Zacks Rank #2.

The Estee Lauder Companies Inc EL has an Earnings ESP of +7.80% and a Zacks Rank #2.

The J. M. Smucker Company SJM has an Earnings ESP of +1.06% and a Zacks Rank #2.

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