Of note as Mondelez (MDLZ) lines up for second quarter results – July 21, 2022


Mondelez International, Inc. (MDLZ Free Report) is likely to post revenue growth when it reports second-quarter 2022 results on July 26. announced figure.

However, Zacks’ consensus estimate for quarterly earnings fell a penny to 63 cents over the past seven days, suggesting a 4.6% drop from the figure reported in the year-ago quarter. This snack and beverage company has a surprise profit of 3.4% on average over the last four quarters. MDLZ achieved a 13.5% profit surprise in the latest reported quarter.

Factors to Note

Mondelez has struggled with cost inflation and supply chain headwinds for some time. These obstacles have been exacerbated by the war in Ukraine. The company is experiencing inflation in input costs, particularly for energy, transportation, packaging, wheat, dairy and edible oils. It also navigates through supply chain bottlenecks due to labor shortages at third parties. Management expects input cost inflation in the low double digit range for 2022, raising concerns for the quarter under review. Investments to support brands and other growth-oriented investments may also have impacted earnings.

Other than that, volatile currency movements are a headwind. In its first quarter 2022 earnings call, management said in 2022, currency movements are expected to negatively impact net revenue by nearly 3% and EPS-adjusted earnings per share by 17 cents in 2022. These are again likely to have affected the results for the quarter under review.

That said, management has taken the necessary steps in pricing, revenue growth management, cost containment and business simplification to counter current cost inflation. Gains from buyouts were also a driver for Mondelez. In addition, the strength of operations in emerging markets helped. In the first quarter of 2022, Emerging Markets revenue increased 15.6% to $2,964 million, while growing 16.5% on an organic basis. The continuation of these trends bodes well.

What the Zacks Model Reveals

Our proven model does not conclusively predict an earnings beat for MDLZ this time around. The combination of a positive earnings ESP and a Zacks rank of #1 (strong buy), 2 (buy), or 3 (hold) increases the chance of an earnings beat, which is not the case here.

Mondelez has a Zacks Rank #4 (sell) and an ESP on earnings of -2.70%. You can discover the best stocks to buy or sell before they’re flagged with our earnings ESP filter.

Actions with favorable combination

Here are a few companies you might want to consider, as our model shows that they also have the right combination of elements to post a pace of profit.

Corteva (VAT Free Report) currently has an Earnings ESP of +8.12% and a Zacks Rank of 1. Zacks’ consensus for quarterly earnings has remained unchanged at $1.46 per share over the past 30 days. The consensus rating for CTVA’s earnings suggests growth of 4.3% from the figure reported a year ago. You can see the full list of today’s Zacks #1 Rank stocks here.

Corteva’s revenue is expected to grow year over year. Zacks’ consensus estimate for quarterly revenue is pegged at $6.2 billion, suggesting a 9.4% increase over the figure reported in the year-ago quarter. CTVA has recorded a profit pace of 22.3%, on average, over the past four quarters.

Archer Daniels (ADM Free Report) currently has an Earnings ESP of +2.59% and a Zacks Rank of 3. Zacks consensus for ADM’s quarterly earnings rose nearly 3% over the past 30 days to $1.74 per share. The consensus mark indicates growth of 30.8% over the number reported for the prior year quarter.

Archer Daniels revenue is expected to grow year over year. Zacks’ consensus estimate for quarterly revenue is pegged at $25.3 billion, suggesting a 10.2% increase from the figure reported in the year-ago quarter. ADM has recorded a profit rate of 22.3%, on average, over the past four quarters.

Tyson Foods (TSN Free Report) currently has an earnings ESP of +5.71% and a Zacks ranking of 3. The company is expected to record an increase in revenue when it reports its third quarter fiscal 2022 results. TSN’s consensus quarterly revenue mark is pegged at $13.4 billion, suggesting a 7% jump from the figure reported in the year-ago quarter.

Tyson Foods’ quarterly earnings consensus mark has fallen from $1.92 to $1.88 per share in the past 30 days. TSN’s consensus third-quarter earnings estimate suggests a 30.4% decline from the figure reported a year ago. Tyson Foods has posted a profit pace of 33.3%, on average, over the past four quarters.

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