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Beverage Stocks to Watch for Q4 Earnings on Feb 9: KO, CCE

The Q4 earnings season has so far seen quarterly releases from 40.6% of the consumer staples companies in the S&P 500 cohort. According to the latest Earnings Preview , 61.5% of the companies have surpassed earnings and 38.5% have beat revenue expectations. Total earnings at these consumer staples companies increased 6.4% while revenues declined 1.3%.

Some of the key players in the sector - General Mills Inc. GIS , The Procter & Gamble Company PG and The Hershey Company HSY - have already released their quarterly numbers. Hershey beat the Zacks Consensus Estimate for earnings by 8.3%, while sales missed the same in fourth-quarter 2016 . General Mills' second-quarter fiscal 2017 adjusted earnings and revenues missed the Zacks Consensus Estimate by 3.4% and 2.4%, respectively. Procter & Gamble's second-quarter fiscal 2017 earnings and revenues exceeded expectations by a respective 1.9% and 0.3%.

Coming to the Beverage-soft drinks industry within the consumer staples sector, the industry has been affected by changing consumer preferences. Consumers are particularly vigilant about the use of artificial sweeteners, high sugar content and related obesity concerns. Also, possible new taxes levied on sugar-sweetened beverages and growing regulatory pressure are affecting Carbonated Soft Drink (CSD) sales. The challenges in the CSD category have been felt by all major soft drink makers - Pepsico, Inc. PEP and Dr Pepper Snapple Group, Inc DPS - leading to lower volumes and weak sales.

Given this backdrop, let's try to determine how these players - The Coca-Cola Company KO and Coca-Cola European Partners PLC CCE - are placed ahead of their earnings release on Feb 9.

Coca-Cola, the world's largest beverage company and leading producer and marketer of soft drinks, is scheduled to report fourth-quarter 2016 results, before the opening bell.

Last quarter, the company posted a positive earnings surprise of 2.08%. In fact, the cola giant surpassed earnings estimates in each of the past four quarters, with an average surprise of 2.63%.

Currently, the company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 36 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

The company has a Zacks Rank #4 (Sell). Please note that we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions (read more: Coca-Cola Q4 Earnings: Disappointment in the Cards? )

Coca-Cola Company (The) Price and EPS Surprise

Coca-Cola Company (The) Price and EPS Surprise | Coca-Cola Company (The) Quote

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 36 cents a share, reflecting a decrease of 4.7% year over year, while the consensus for revenues is at $9.10 billion, implying a 9% year-over-year decline.

Coca-Cola European Partners , also known as CCEP, is a consumer packaged goods company, engaged in producing, distributing and marketing nonalcoholic ready-to-drink beverages. It is expected to report fourth quarter and full-year 2016 results.

Last quarter, the company posted a positive earnings surprise of 2.78%. The company surpassed earnings estimates in three of the past four quarters, with an average surprise negative surprise of 1.13%.

Currently, the company has an Earnings ESP of -4.35% as the Most Accurate estimate of 44 cents per share is lower than the Zacks Consensus Estimate of 46 cents.

CCEP's Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about a positive earnings surprise (read more: What Awaits Coca-Cola Enterprises in Q4 Earnings? )

Coca-Cola European Partners PLC Price and EPS Surprise

Coca-Cola European Partners PLC Price and EPS Surprise | Coca-Cola European Partners PLC Quote

For the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 46 cents, reflecting a 14% year-over-year decline, while the consensus for revenues is at $2.79 billion, implying a 71.4% year-over-year increase.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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Coca-Cola European Partners PLC (CCE): Get Free Report

Coca-Cola Company (The) (KO): Get Free Report

Dr Pepper Snapple Group, Inc (DPS): Get Free Report

Pepsico, Inc. (PEP): Get Free Report

Hershey Company (The) (HSY): Get Free Report

General Mills, Inc. (GIS): Get Free Report

Procter & Gamble Company (The) (PG): Get Free Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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