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Coca-Cola European Partners (CCE) Q4 Earnings: What's Up?

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Coca-Cola European Partners Plc or CCEP is set to report fourth-quarter 2017 results, before the opening bell on Feb 15.

Last quarter, it delivered a positive earnings surprise of 2.19%. The company surpassed the Zacks Consensus Estimate for earnings in the trailing four quarters, with an average beat of 5.52%.

A Few Other Factors That Might Affect Q4 Results:

CCEP is gaining significant synergies from the merger and is expected to continue driving growth in the foreseeable future. The company’s continuous focus on brand and packaging innovation, strengthening execution and customer service, and further improving operating effectiveness will help in driving growth.

Last quarter, although the company registered weak revenues, its cost saving plans are helping to boost its bottom line. In the third quarter, operating expenses decreased 3% on a comparable and currency neutral basis. This reflects the synergy benefits, volume-related costs, expense timing and a continued focus on managing operating expenses. These factors contributed to operating profit growth of 3.5%, on a comparable and currency neutral basis.

In the first nine months of 2017, revenues were up 3% and operating profit was up 11.5%, both on a comparable and currency neutral basis. Excluding synergies, operating profit grew about 3%, broadly in line with revenues growth in the said period. We expect the growth momentum to continue in the to-be-reported quarter as well.

Importantly, CCEP remains on track to achieve pre-tax synergy savings of €315-€340 million by mid-2019.

Overall, for the fourth quarter, the Zacks Consensus Estimate for earnings is pegged at 55 cents, reflecting a 19.6% year-over-year increase. The consensus estimate for revenues is $3.1 billion, implying a 10.1% increase.

Here Is What Our Quantitative Model Predicts:

CCEP has the right combination of two main ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

Zacks ESP: The Earnings ESP for CCEP is 2.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: CCEP carries a Zacks Rank #3, which further increases the odds of an earnings beat.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Release

PepsiCo, Inc. (PEP - Free Report) reported fourth-quarter 2017 (ending Dec 30) results, with earnings and revenues beating the Zacks Consensus Estimate. Notably, this is the seventh consecutive quarter of positive earnings surprise.

Upcoming Peer Releases

The Coca-Cola Company (KO - Free Report) is scheduled to report quarterly results on Feb 16.

Monster Beverage Corp. (MNST - Free Report) is expected to report quarterly results on Mar 7.

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