Back to top

Analyst Blog

The Coca-Cola Company (KO - Analyst Report) is set to report its first-quarter 2013 results on Apr 16 before the market opens. Last quarter, it posted a 2.3% positive surprise. Let’s see how things are shaping up for this announcement.

Growth Factors this Past Quarter

Earnings beat the Zacks Consensus Estimates in the fourth quarter by a penny. It grew 15% from the prior-year quarter as tepid revenue growth was offset by solid operating margins, which gained from two extra selling days and lower-than-expected currency headwinds. Revenues increased 4% in the quarter as benefits from volume growth was offset by an almost flat price/mix.

Volumes improved 3% in the quarter as volume growth in North America, Eurasia and Africa, and Latin America offset the weakness in Europe, China and Japan. The still beverages did better than the carbonated beverages. Changing consumer preferences, increasing health consciousness, rising obesity concerns, possible new taxes on sugar-sweetened beverages and growing regulatory pressures are affecting sparkling beverage sales for Coca-Cola as well as its peers, such as PepsiCo, Inc. (PEP - Analyst Report).

Earnings Whisper

Our proven model does not conclusively show that Coca-Cola is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP:  The Earnings ESP is 0.00%.

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

Other Stocks to Consider

Here are some other companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:  

Molson Coors Brewing Company (TAP - Analyst Report), with Earnings ESP of +2.86% and a Zacks Rank #2 (Buy)

Mondelez International, Inc. (MDLZ - Analyst Report), with an Earnings ESP of +2.94% and a Zacks Rank #3 (Hold)

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.81 +7.32%
BANCO DO BR… BDORY 14.49 +3.87%
WEATHERFORD… WFT 23.78 +3.71%
GREEN PLAIN… GPRE 44.99 +2.69%
EQT MIDSTRE… EQM 97.46 +2.67%