Things You Must Know Ahead of Coca-Cola's (KO) Q2 Earnings
The Coca-Cola Company KO is expected to register top and bottom-line growth when it reports second-quarter 2021 numbers on Jul 21, before the opening bell. The Zacks Consensus Estimate for the company’s second-quarter earnings stands at 55 cents, suggesting growth of 30.9% from the year-ago quarter’s reported figure. Further, the consensus mark has been unchanged in the past 30 days.
For second-quarter revenues, the consensus mark is pegged at $9.4 billion, suggesting 31.5% growth from the prior-year quarter’s reported figure.
In the last reported quarter, the leading soft-drink behemoth delivered an earnings surprise of 10%. Moreover, its bottom line beat the Zacks Consensus Estimate by 12.96%, on average, over the trailing four quarters.
CocaCola Company The Price and EPS Surprise
CocaCola Company The price-eps-surprise | CocaCola Company The Quote
Key Points to Note
Coca-Cola’s results in the recent quarters have been benefiting from an improved price/mix and an increase in concentrate sales, which is expected to have continued in the second quarter. The company’s top line is also likely to have benefited from strong volume trends, with continued strength in the off-premise channel. Volume gains in the trademark Coca-Cola, sparkling flavors, and the nutrition, juice, dairy and plant-based beverages category are expected to get reflected in the company’s second-quarter results.
Its second-quarter results are expected to reflect gains from its efforts to constantly refresh and streamline its brand portfolio. In an effort to streamline its portfolio, the company discontinued its energy drink line in North America in May 2021. It has also been maximizing shelf space with new and higher-velocity products to fuel growth. Coca-Cola is highly focused on disciplined resource allocation to cash in on the biggest opportunities, while making quick portfolio decisions. The company’s second-quarter performance is expected to have benefited from these efforts.
The second-quarter results are expected to reflect gains from accelerated investments to expand digital presence. Coca-Cola is steadily witnessing a splurge in e-commerce, driven by a shift in consumer behavior amid the coronavirus outbreak. The company has been consistently strengthening consumer connections and further piloting various digital-enabled initiatives through fulfillment methods to capture the online demand.
Aggressive cost-saving measures across the organization are also expected to have helped cushion operating margin in the second quarter. This is anticipated to have aided the bottom line.
However, continued pressures in the away-from-home channel, which account for nearly half of its revenues, are expected to have affected revenues. Headwinds in the hydration category are expected to have partly offset volume gains in the second quarter. Also, gains in the global value share in NARTD beverages are expected to have been offset by a negative channel mix.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Coca-Cola this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances 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.
Coca-Cola has a Zacks Rank #3 and an Earnings ESP of 0.00%.
Stocks Likely to Beat on Earnings
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Darling Ingredients Inc. DAR has an Earnings ESP of +8.86% and it presently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Mondelez International, Inc. MDLZ currently has an Earnings ESP of +4.04% and a Zacks Rank #2.
Tyson Foods, Inc. TSN has an Earnings ESP of +15.06% and a Zacks Rank #2 at present.
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CocaCola Company The (KO) : Free Stock Analysis Report
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