Will Higher Costs Hit Coca-Cola Bottling (COKE) Q4 Earnings?

Coca-Cola Bottling Co. Consolidated (NASDAQ:COKE) is scheduled to report fourth-quarter 2017 financial numbers on Feb 27, 2018, after the closing bell.

This large independent bottler of The Coca-Cola Company (NYSE:KO) has an encouraging strategy to grow both organically and through the acquisition of additional manufacturing and distribution territory.

A Look at its Sales Performance

The company’s third quarter was one of the most challenging quarters with softer-than-expected sales performance in certain channels of trade. The quarter was impacted by hurricanes, which resulted in negative product sourcing impacts and a noticeable shift in product mix during September to lower margin case pack water. Despite these challenges, the company continued to grow with total sales increasing almost 37%, comparable net sales up 1.4% and comparable equivalent unit case volume growth of 1.0%.

In the first nine months of 2017, Coca-Cola Bottling reported net sales growth of 38.1% year over year primarily on acquisitions and a 2% hike in comparable net sales on a 1.6% rise in comparable equivalent unit case volumes. The trend is expected to continue in the fourth quarter as well.

The sparkling product portfolio and higher margin still product range drove comparable net sales. Sparkling product comparable volumes grew 0.5% year over year while that of still products increased 4.1% in the first nine months of 2017. This is expected to continue in the to-be-reported quarter.

Higher Expenses a Woe

Higher expenses (such as expansion transaction and amortization expenses) might dent the company’s bottom line. Notably, the stock saw dismal trading in the last six months, with the stock losing 11.5%, compared with the industry’s 2.3% decline.

In the third quarter, the company’s net income plunged 25.2% year over year and in the first nine months of 2017, and net income declined more than 35%.



Peer Releases

The Coca-Cola Company’s comparable earnings in the fourth quarter of 2017 were 39 cents per share, surpassing the Zacks Consensus Estimate of 38 cents. Earnings also improved from the year-ago profit level of 37 cents, helped by ongoing productivity efforts.

PepsiCo (NASDAQ:PEP) recently reported fourth-quarter 2017 earnings per share of $1.31, beating the Zacks Consensus Estimate of $1.30 and increasing 9% year over year.

Upcoming Peer Release

Monster Beverage Corporation (NASDAQ:MNST) is scheduled to report fourth-quarter 2017 results on Feb 28, 2018, after the closing bell.

PepsiCo and Coca-Cola carry a Zacks Rank #3 (Hold), while Monster Beverage carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Coca-Cola Company (The) (KO): Free Stock Analysis Report

Pepsico, Inc. (PEP): Free Stock Analysis Report

Monster Beverage Corporation (MNST): Free Stock Analysis Report

Original post

Zacks Investment Research