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Factors Likely to Influence Coca-Cola's (KO) Q4 Earnings
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The Coca-Cola Company (KO - Free Report) is expected to register top-line growth when it reports fourth-quarter 2021 numbers on Feb 10, before the opening bell. The Zacks Consensus Estimate for the company’s fourth-quarter revenues is pegged at $8.9 billion, suggesting 3.3% growth from the prior-year quarter’s reported figure.
For fourth-quarter earnings, the consensus mark is pegged at 40 cents, suggesting a decline of 14.9% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days.
In the last reported quarter, the leading soft-drink behemoth delivered an earnings surprise of 12.1%. Its bottom line beat the Zacks Consensus Estimate by 14%, on average, over the trailing four quarters.
Coca-Cola’s results in the recent quarters have been benefiting from strategic transformation and ongoing recovery around the world. The company’s top line has been improving, owing to the increased consumer mobility and the reopening of economies in several parts, which have led to increased away-from-home channel sales. The persistence of growth in the away-from-home channel is expected to have boosted volumes in the to-be-reported quarter. The company’s revenues are expected to have gained from improved price/mix, higher concentrate sales and unit case volume growth in the fourth quarter.
The impacts of volume gains in the trademark Coca-Cola; sparkling flavors; the nutrition, juice, dairy and plant-based beverages; and hydration, sports, coffee and tea categories are expected to get reflected in the company’s fourth-quarter results. Price/mix is likely to have benefited from pricing actions in the marketplace coupled with favorable channel and package mix due to the lapping of last year’s pandemic-led disruptions.
Accelerating investments to expand its digital presence are also expected to have boosted the company’s fourth-quarter performance. Coca-Cola has been witnessing a splurge in e-commerce, with the growth rate of the channel doubling in many countries. The company has been consistently strengthening consumer connections and further piloting various digital-enabled initiatives through fulfillment methods to capture the online demand, which are likely to have boosted fourth-quarter sales.
Aggressive cost-saving measures across the organization are also expected to have helped partly cushion the operating margin in the fourth quarter. This is anticipated to have aided the bottom line.
However, the company has been witnessing pressures from higher supply-chain costs, including higher commodity input costs and transportation expenses. It has also been witnessing pressures related to commodity and material cost inflation. The pressures from input cost inflation and other costs are likely to have hurt the performance in the fourth quarter.
Coca-Cola has been investing in its markets and brands to support sales growth, with higher spending toward consumer-facing activities. This has led to higher marketing investments in the past few quarters. Higher marketing spending, and an increase in short-term incentive and stock-based compensation are also expected to have led to increased selling, general and administrative expenses in the fourth quarter.
On the last reported quarter’s earnings call, the company expected marketing spend for consumer-facing activity to increase similar to 2019 levels in the quarter’s ahead, implying significant growth in the fourth quarter.
Zacks Model
Our proven model does not predict an earnings beat for Coca-Cola this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Coca-Cola has a Zacks Rank #3 and an Earnings ESP of -0.36%.
Stocks Likely to Beat on Earnings
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Coty (COTY - Free Report) currently has an Earnings ESP of +37.14% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports fourth-quarter 2021 numbers. The consensus mark for COTY’s quarterly earnings has been unchanged in the past 30 days at 12 cents per share. However, the consensus estimate suggests a 29.4% decline from the year-ago quarter’s reported number.
Coty’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.6 billion, which suggests a rise of 13.8% from the figure reported in the prior-year quarter.
Hormel Foods (HRL - Free Report) currently has an Earnings ESP of +1.14% and a Zacks Rank of 3. The company is likely to register an increase in the top and bottom lines when it reports first-quarter fiscal 2022 results. The consensus mark for HRL's quarterly revenues is pegged at $2.87 billion, which suggests a rise of 16.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate has moved down 8.3% to 44 cents per share in the past 30 days. The consensus estimate indicates 7.3% growth from 41 cents reported in the year-ago quarter.
Beyond Meat (BYND - Free Report) currently has an Earnings ESP of +0.69% and a Zacks Rank of 3. The company is likely to register top-line growth when it reports fourth-quarter 2021 earnings. The consensus mark for quarterly revenues is pegged at $104 million, which suggests 2% growth from the figure reported in the prior-year quarter.
The consensus mark for quarterly earnings has been unchanged in the past 30 days at a loss of 73 cents per share. However, the loss estimate for BYND has widened significantly from 34 cents per share witnessed in the year-ago quarter.
Image: Bigstock
Factors Likely to Influence Coca-Cola's (KO) Q4 Earnings
The Coca-Cola Company (KO - Free Report) is expected to register top-line growth when it reports fourth-quarter 2021 numbers on Feb 10, before the opening bell. The Zacks Consensus Estimate for the company’s fourth-quarter revenues is pegged at $8.9 billion, suggesting 3.3% growth from the prior-year quarter’s reported figure.
For fourth-quarter earnings, the consensus mark is pegged at 40 cents, suggesting a decline of 14.9% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days.
In the last reported quarter, the leading soft-drink behemoth delivered an earnings surprise of 12.1%. Its bottom line beat the Zacks Consensus Estimate by 14%, on average, over the trailing four quarters.
CocaCola Company The Price and EPS Surprise
CocaCola Company The price-eps-surprise | CocaCola Company The Quote
Key Points to Note
Coca-Cola’s results in the recent quarters have been benefiting from strategic transformation and ongoing recovery around the world. The company’s top line has been improving, owing to the increased consumer mobility and the reopening of economies in several parts, which have led to increased away-from-home channel sales. The persistence of growth in the away-from-home channel is expected to have boosted volumes in the to-be-reported quarter. The company’s revenues are expected to have gained from improved price/mix, higher concentrate sales and unit case volume growth in the fourth quarter.
The impacts of volume gains in the trademark Coca-Cola; sparkling flavors; the nutrition, juice, dairy and plant-based beverages; and hydration, sports, coffee and tea categories are expected to get reflected in the company’s fourth-quarter results. Price/mix is likely to have benefited from pricing actions in the marketplace coupled with favorable channel and package mix due to the lapping of last year’s pandemic-led disruptions.
Accelerating investments to expand its digital presence are also expected to have boosted the company’s fourth-quarter performance. Coca-Cola has been witnessing a splurge in e-commerce, with the growth rate of the channel doubling in many countries. The company has been consistently strengthening consumer connections and further piloting various digital-enabled initiatives through fulfillment methods to capture the online demand, which are likely to have boosted fourth-quarter sales.
Aggressive cost-saving measures across the organization are also expected to have helped partly cushion the operating margin in the fourth quarter. This is anticipated to have aided the bottom line.
However, the company has been witnessing pressures from higher supply-chain costs, including higher commodity input costs and transportation expenses. It has also been witnessing pressures related to commodity and material cost inflation. The pressures from input cost inflation and other costs are likely to have hurt the performance in the fourth quarter.
Coca-Cola has been investing in its markets and brands to support sales growth, with higher spending toward consumer-facing activities. This has led to higher marketing investments in the past few quarters. Higher marketing spending, and an increase in short-term incentive and stock-based compensation are also expected to have led to increased selling, general and administrative expenses in the fourth quarter.
On the last reported quarter’s earnings call, the company expected marketing spend for consumer-facing activity to increase similar to 2019 levels in the quarter’s ahead, implying significant growth in the fourth quarter.
Zacks Model
Our proven model does not predict an earnings beat for Coca-Cola this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Coca-Cola has a Zacks Rank #3 and an Earnings ESP of -0.36%.
Stocks Likely to Beat on Earnings
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Coty (COTY - Free Report) currently has an Earnings ESP of +37.14% and a Zacks Rank of 3. The company is likely to register an increase in the top line when it reports fourth-quarter 2021 numbers. The consensus mark for COTY’s quarterly earnings has been unchanged in the past 30 days at 12 cents per share. However, the consensus estimate suggests a 29.4% decline from the year-ago quarter’s reported number.
Coty’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.6 billion, which suggests a rise of 13.8% from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Hormel Foods (HRL - Free Report) currently has an Earnings ESP of +1.14% and a Zacks Rank of 3. The company is likely to register an increase in the top and bottom lines when it reports first-quarter fiscal 2022 results. The consensus mark for HRL's quarterly revenues is pegged at $2.87 billion, which suggests a rise of 16.6% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate has moved down 8.3% to 44 cents per share in the past 30 days. The consensus estimate indicates 7.3% growth from 41 cents reported in the year-ago quarter.
Beyond Meat (BYND - Free Report) currently has an Earnings ESP of +0.69% and a Zacks Rank of 3. The company is likely to register top-line growth when it reports fourth-quarter 2021 earnings. The consensus mark for quarterly revenues is pegged at $104 million, which suggests 2% growth from the figure reported in the prior-year quarter.
The consensus mark for quarterly earnings has been unchanged in the past 30 days at a loss of 73 cents per share. However, the loss estimate for BYND has widened significantly from 34 cents per share witnessed in the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.