Anheuser-Busch InBev SA/NV (BUD), also known as AB InBev, will release its fourth-quarter 2014 financial results on Feb 26, 2015, before the market opens. In the prior quarter, this alcoholic-beverage giant reported a negative surprise of 5.3%. Let’s see how things shaping up for this announcement.
Factors Influencing the Quarter
Despite a mixed third quarter and a challenging macroeconomic environment, the world’s largest alcoholic-beverage company continues to expect volume growth in the U.S., Mexico, Brazil and China. The company’s net revenue per hectoliter will likely grow at par with inflation while cost of goods sold per hectoliter is expected to increase in the low-single digits in fiscal 2014. Furthermore, AB InBev intends to make capital expenditure of $3.7 billion for innovation and capitalization of emerging opportunities in the market.
Though we are encouraged with the overall fourth-quarter performance based on volume growth forecast, we remain slightly skeptical due to the estimated rise in costs.
Earnings Whispers?
Our proven model does not conclusively show that AB InBev is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, this is not the case here, as you will see below:
Zacks ESP: ESP for AB InBev is 0.00%. This is because the Most Accurate estimate stands at $1.44 per share, which is in line with the Zacks Consensus Estimate.
Zacks Rank: AB InBev’s Zacks Rank #3 (Hold) when combined with 0.00% ESP makes surprise prediction difficult. We caution against stocks with a Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Here are some other companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat:
CST Brands Inc.’s (CST) Earnings ESP stands at +11.11% and it has a Zacks Rank #1 (Strong Buy).
Kroger Co. (KR) has an Earnings ESP of +4.49% and a Zacks Rank #2 (Buy).
Kohl's Corp. (KSS) has an Earnings ESP of +0.56% and a Zacks Rank #2.
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