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Things to Know Before Keurig Dr Pepper's (KDP) Q3 Earnings

Zacks Equity Research

Keurig Dr Pepper Inc. KDP is slated to report third-quarter 2019 results on Nov 7.

The company delivered a positive earnings surprise in three of the last four quarters, the average beat being 5%. However, its sales missed estimates in four of the last five quarters. Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Estimate Picture

The Zacks Consensus Estimate for third-quarter earnings is pegged at 31 cents, indicating 3.3% growth from 30 cents earned in the year-ago quarter. The consensus mark has been unchanged over the past 30 days.

Keurig Dr Pepper, Inc Price and EPS Surprise

 

Keurig Dr Pepper, Inc Price and EPS Surprise

Keurig Dr Pepper, Inc price-eps-surprise | Keurig Dr Pepper, Inc Quote

For quarterly revenues, the consensus estimate is pinned at $2.86 billion, suggesting rise of about 0.1% from the year-ago reported figure.

Factors at Play

Keurig Dr Pepper has been witnessing soft sales trend for quite some time now, which is likely to have continued in third-quarter 2019 as well. Adverse effects of changes made in its Allied Brands portfolio, unfavorable comparisons due to a calendar shift this year and currency headwinds are the key reasons for the company’s soft sales performance. Additionally, industry-wide challenges, including a slower rate of CSD category growth and higher input costs, remain concerns.

However, higher adjusted operating income and a considerable decline in interest expenses due to reduced indebtedness and unwinding of several interest rate swap contracts are likely to get reflected in the company’s bottom lines. Furthermore, its efforts to bolster business through the launch of innovative product lines as well as investing in production and supply-chain facilities to support growth might have aided operating performance. Additionally, gains from its efforts to enhance the portfolio, through partnerships and acquisitions, are expected to get reflected in the upcoming quarterly results.

What the Zacks Model Says

Our proven model doesn’t conclusively predict an earnings beat for Keurig Dr Pepper 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Keurig Dr Pepper has a Zacks Rank #4 (Sell) and Earnings ESP of -1.61%.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to deliver an earnings beat:

e.l.f. Beauty Inc ELF has an Earnings ESP of +10.71%. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Inter Parfums, Inc IPAR presently has an Earnings ESP of +7.87% and a Zacks Rank #2.

Ollie's Bargain Outlet Holdings, Inc OLLI currently has an Earnings ESP of +3.45% and a Zacks Rank #3.

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Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
 
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