The Coca-Cola Company (N:KO) Consumer Staples - Beverages | Reports February 9, Before Market Opens
Key Takeaways
- The Estimize community is calling for EPS of $0.3 and revenue of $9.924 billion, slightly higher than the Wall Street consensus
- A fundamental shift in consumer demand has caused weaker sales for the beverage company
- Coca-Cola is leveraging key partnerships and cost cutting initiatives to stimulate long term growth
- What are you expecting for KO?
Coca-Cola (KO) is scheduled to report fourth quarter earnings February 9, before the market opens. Despite its iconic stature in American history, the cola giant has struggled with weaker sales as consumers become more health conscious. The last two quarters the company reported weaker YoY growth and expectations suggest that will be the case again this Tuesday. The Estimize community is calling for EPS of $0.38 and revenue of $9.924 billion, slightly higher than the Wall Street consensus. Compared to Q4 2014, this represents a projected YoY decline in EPS and revenue of 11% and 7%, respectively. Besides waning consumer demand, macroeconomic conditions and foreign exchange fluctuations have impacted sales. On the bright side, the company’s cost cutting and strategic initiatives have already led to improved results in 2015.
To offset slumping soda sales, driven by a shift in consumer sentiment toward healthy alternatives, Coca-Cola continues to innovate on new products. The company’s formidable portfolio of brands has allowed it to consistently increase the volume of sales and steal market share. Coca-Cola’s recent partnerships with Keurig lets consumers make their favorite beverages at home. Coke also launched a partnership with Monster Beverage Corporation (O:MNST) to expand distribution channels, allowing the beverage maker to gain a position in the global energy drinks sector. These strategic partnerships have significantly cut overhead costs, allowing the company to direct its resources to new marketing initiatives which have supported volume growth in the first three quarters of 2015. Despite these initiatives, carbonated beverages have remained flat. Moreover, the macroeconomic environment is likely to remain volatile, putting a drag on global sales especially in emerging markets.
Do you think KO can beat estimates?