Coca-Cola (KO) to Report Q1 Earnings: What's in the cards?

The Coca-Cola Company KO is scheduled to report first-quarter 2020 earnings on Apr 22, before the opening bell. In the last reported quarter, the leading soft-drink maker delivered a positive earnings surprise of 2.3%. Moreover, its bottom line beat the Zacks Consensus Estimate by 2.1%, on average, over the trailing four quarters.

The Zacks Consensus Estimate for the company’s first-quarter earnings stands at 44 cents, suggesting a decline of 8.3% from the year-ago quarter’s reported figure. Further, the consensus mark has moved south by 8.3% in the past 30 days. For first-quarter revenues, the consensus mark is pegged at $8.49 billion, suggesting a 5.9% increase from the prior-year quarter’s reported figure.

Key Points to Note

Coca-Cola’s positive surprise trend has been well-supported by its effective execution of strategies to evolve as a consumer-centric total beverage company. Its strategy of introducing products alongside a focus on lifting and shifting successful brands globally has been aiding performance. It has also been benefiting from the acceleration of sparkling soft drink category through investment and innovation.

Coca-Cola Company (The) Price and EPS Surprise

  Coca-Cola Company (The) Price and EPS Surprise

Coca-Cola Company (The) price-eps-surprise | Coca-Cola Company (The) Quote

However, the company is not immune to the effects of the ongoing coronavirus pandemic, which initially emerged in China. In February, it announced that the coronavirus outbreak in China, which is its third-largest market in the world, based on unit case volume, is likely to hurt its first-quarter 2020 performance. Notably, China contributes nearly 10% to the company’s global volume. It predicted that the COVID-19 outbreak in the country will hurt first-quarter 2020 organic revenues by 1-2 percentage points, unit case volume by 2-3 percentage points and earnings per share by 1-2 cents.

Furthermore, it expects the persistence of the adverse currency rates to mar results in the first quarter of 2020. On the lastearnings call it predicted that unfavorable currency will affect first-quarter revenues by 2% and comparable operating income by 5%.

Zacks Model

Our proven model does not 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. 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 #4 (Sell) and an Earnings ESP of -1.20%.

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:

The Clorox Company CLX presently has an Earnings ESP of +2.56% and it sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kimberly-Clark Corporation KMB has an Earnings ESP of +0.44% and a Zacks Rank #3 at present.

Kellogg Company K currently has an Earnings ESP of +2.41% and a Zacks Rank #3.

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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.

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