Coca-Cola Company Earnings Preview

Motley Fool Staff
Updated

Investors hope Coca-Cola Company (NYS: KO) will top analyst estimates once again after beating predictions by one cent in the previous quarter. The company will unveil its latest earnings on Tuesday, October 18. Coca-Cola is a leading manufacturer of nonalcoholic beverage concentrates and syrups.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Coca-Cola, with 11 of 13 rating it a buy and the remainder rating it a hold. Analysts like Coca-Cola better than competitor PepsiCo overall. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared to three months ago.

  • Revenue Forecasts: On average, analysts predict $12.02 billion in revenue this quarter. That would represent a rise of 42.6% from the year-ago quarter.

  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $1.02 per share. Estimates range from $0.98 to $1.03.

What our community says:
CAPS All-Stars are solidly behind the stock with 97% granting it an "outperform" rating. The community at large agrees with the All-Stars with 95.1% giving it a rating of "outperform." Fools have embraced Coca-Cola and haven't been shy with their opinions lately, logging 1,567 posts in the past 30 days. Coca-Cola has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Coca-Cola's profit has risen year over year by an average of 79.5% over the past five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 5.1 percentage points in the last quarter. Revenue rose 46.8% while cost of sales rose 68.8% to $4.99 billion from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

60.8%

62.5%

59.2%

65.4%

Operating Margin

24.9%

21.7%

11%

27.8%

Net Margin

22%

18.1%

55%

24.4%

For all our Coca-Cola-specific analysis, including earnings and beyond, add Coca-Cola to My Watchlist.

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At the time thisarticle was published

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