Coca-Cola Co is expected to report higher earnings per share on Tuesday, despite weak demand in the United States, where recent gloomy economic data signals the likelihood of a slower recovery.
Many analysts are expecting the world's largest soft drink maker -- with brands like Sprite, Minute Maid, vitaminwater and Powerade -- to meet or beat Wall Street's consensus estimate of $1.16 per share, according to Thomson Reuters I/B/E/S.
Analysts on average expect revenue of $12.38 billion, driven by strong growth in emerging markets like India and Turkey, with weaker results in Europe and North America.
Atlanta-based Coke does the majority of its business outside the United States, an asset that has kept it in favor with investors despite struggles in its home market, where anemic jobs growth has kept a lid on sales of soft drinks.
"Employment is a key driver of demand for consumer staples," said Morningstar analyst Philip Gorham. He said he will be keen to know how sales fared late in the quarter, after U.S. jobs growth ground to a near halt in June.
"I think probably what we'll find is the second quarter was a tale of two halves, with the first half seeming to appear bright," Gorham said.
Another factor to watch, he said, was Coke's market share after PepsiCo rolled out a new marketing campaign for its flagship cola for the first time in years, after the brand fell to No. 3 in the United States behind Coca-Cola and Diet Coke.
Analysts are also looking out for comments on the impact of higher raw material costs, and Coke's pricing plans to offset them.
Coke has said it planned to raise prices by 3 percent to 4 percent this year at home, following a 1 to 2 percent increase in the first quarter, to offset higher prices for everything from fuel to packaging.
JP Morgan analyst John Faucher said he could foresee "modest appreciation" in Coke shares following the news, if results are in line with expectations and the company signals more price increases.
"The one bigger positive could be the chatter about pricing," Faucher wrote in a research note. "While we remain unconvinced that Coca-Cola will truly take enough pricing in North America, the rhetoric, at least, is improving."
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