Cott Corporation

Cott Corporation (COT - Snapshot Report) has posted big earnings surprises of 240% and 528% the last two quarters. With third quarter results due on Oct 29, will it keep its streak intact?

Company Description

Cott manufactures non-alcoholic beverages and is one of the world's largest retailers of brand soft drinks. It partners with customers to produce private label soft drinks as well as distributes its own brands under the names Cott, RC, Ben Shaws, Stars & Stripes, Vintage and Vess.

Cott also recently introduced ready-to-drink teas, flavored waters, energy drinks, juice drinks and smoothies. The company's brands are sold in over 60 countries.

Zacks Consensus Estimates Rising

Cott is scheduled to report third quarter results on Oct 29. The third quarter Zacks Consensus Estimate rose 1 cent in the last 30 days to 16 cents as 1 out of 6 covering analysts raised during that time.

The full-year Zacks Consensus Estimates have been holding at 65 cents in the last 60 days, up from 38 cents in the last 3 months. Analysts expect 2009 earnings growth of 645%.

Cott Surprised by 240% in the Second Quarter

On July 27, Cott reported its second quarter results which easily surpassed the Zacks Consensus Estimate by 36 cents per share. Earnings per share were 51 cents compared to the estimate of 15 cents. The company posted a loss of 3 cents a share in the year ago period.

Revenue, however, declined by 5.9% to $438.8 million from $466.5 million in the second quarter of 2008. Global beverage case volume slid 2.5%. The Mexican market saw the worst of it, as beverage case volume fell 32.5% due to the global recession and the impact of the H1N1 virus. Mexican revenues fell 41.1% year over year.

North American beverage case volume was basically flat compared to the year ago period.

However, the company saw reasons for optimism.

"We are pleased with our second quarter results which were driven by the steady improvement of our North American operations and a stronger volume performance in our U.K. business," said Jerry Fowden, CEO.

Value Fundamentals

Cott is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 12.7 and a price-to-book ratio of 1.98. The company also has a stellar 1-year return on equity (ROE) of 18.80%.

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