Coca-Cola Co (NYSE: KO) will be reporting its first quarter 2007 earnings before the market opens next Tuesday (April 17). The last time the company reported earnings was back on Valentine's Day, when it was able to put up better than expected earnings for its fourth quarter 2006. At that time, the company posted earnings of $0.52, which came in higher than analyst estimates of $0.50. Sweet.
Coca-Cola has a strong history of beating Wall Street's expectations, so it would come as no surprise to me if the company is able to beat its numbers again this quarter. In fact, to find the last time that Coke was unable to post better than expected earnings, you would have to go all the way back to April 16, 2003 when it matched estimates for its first quarter 2003 report.
During the company's last conference call, the mood was upbeat, with the exception of one area: North American performance. At that time it predicted to see more weakness in the North American division through the first half of 2007 and then a gradual improvement as we head into the second half of the year. On March 9, the company announced that it was going to massively reorganize its North American business and break the division up into three segments. The resulting three businesses are sparkling beverages, still beverages, and emerging brands. We will see how this situation has been unfolding and what sort of guidance it offers for the latter part of this year at this juncture.
Coke will definitely be looking to protect its reputation next week after getting a shot in the ribs today from Sanford C. Bernstein & Co. Bernstein upgraded Coke's arch rival PepsiCo Inc (NYSE: PEP) stating that it thinks Pepsi's growth over the next five years will outperform that of Coke. You can be sure that Coke executives caught wind of that and will be ready to answer some questions on that topic when analysts get a chance to ask their thoughts on that matter next Tuesday.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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