Beverage Stocks Earnings Releases on Aug 2: SODA, TAP & PRMW

We are in the heart of the Q2 earnings season. In the second quarter, growth is still not visible, with the quarter on track to be the fifth in a row to record an earnings decline for the S&P 500 index. Having said that, the rate of decline is seen to be moderating from the previous quarter, pacifying investors' concern.

If we summarize the performance of the 317 S&P 500 members that have reported financial results so far, we will see that 72.9% beat on earnings and 53.6% surpassed revenue estimates, as per our Earnings Preview report. However, total earnings for these companies were down 3.3% year over year while revenues declined 0.9%. 

Beverage stocks have had a good Q2 2016 with leading food/beverage giant PepsiCo, Inc. PEP once again reporting stellar results in July, thereby bringing the sector to the limelight. Pepsi also upped its full year earnings growth target based on its strong performance in the first half and a favorable outlook.

Another soft drink behemoth Dr. Pepper Snapple Group, Inc. DPS reported strong second-quarter 2016 results on Jul 27. It surpassed the Zacks Consensus Estimate for both earnings and sales for the fourth quarter in a row. Dr. Pepper Snapple raised its guidance for full year 2016 and revealed that it expects to return over $1 billion to shareholders in the form of dividends and share repurchases.

Higher sales of the so-called "healthy" non-carbonated drinks, improved performance in the North America segment, pricing gains, lower costs of key raw materials, cost reductions along with productivity gains and overall better execution have helped these soft drink companies to deliver impressive results in the past few quarters.

However, beverage giant The Coca-Cola Company KO reported soft second-quarter 2016 results last week. Though the cola giant beat the Zacks Consensus Estimate for earnings, it missed the same for sales due to severe macroeconomic challenges in many international markets. Importantly, soda volumes declined in the all-important North America segment. Further, Coca-Cola lowered its previously issued sales guidance for 2016 and guided for an adjusted earnings decline in the year.

Here we have three beverage stocks, which are scheduled to release their second-quarter numbers tomorrow. Let's see how things are shaping up for their announcements.

Molson Coors Brewing Company TAP, one of the largest global brewers, is scheduled to report second-quarter 2016 on Aug 2. It has an Earnings ESP of -2.66% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for second quarter earnings is pegged at $1.13 per share. Additionally, the company has delivered an average positive earnings surprise of 8.80% in the trailing four quarters.

While Molson Coors' cost-savings initiatives, continuous focus on brand building and increased marketing investments should have a positive impact on the second quarter results, weak volumes might hinder growth in the to-be-reported quarter. (Read: Will Weak Volumes Hurt Molson Coors' Q2 Earnings?).

MOLSON COORS-B Price and EPS Surprise

MOLSON COORS-B Price and EPS Surprise | MOLSON COORS-B Quote

SodaStream International Ltd. SODA is slated to release second-quarter 2016 results on Aug 2. It has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate for second quarter earnings is pegged at 19 cents. This Israel-based manufacturer of household soda makers delivered positive earnings surprises in two of the past four quarters with an average surprise of 20.12%.

After reporting weak sales results for quite some time due to low demand for its products, SodaStream reported strong sales and margins in first-quarter 2016, on the back of new flavors on the shelf and enhanced efficiency and operating performance from the fully-functional Lehavim production facility. We expect the positive trend to reflect in the second quarter results. (Read: What's in Store for SodaStream in Q2 Earnings?).

SODASTREAM INTL Price and EPS Surprise

SODASTREAM INTL Price and EPS Surprise | SODASTREAM INTL Quote

Primo Water Corporation PRMW is a provider of three- and five-gallon purified bottled water and water dispensers. It will report its second quarter 2016 results on Aug 2, after the market closes. It has an ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate is pegged at 5 cents. Additionally, the company has delivered an average positive earnings surprise of 291.67% in the trailing four quarters.

PRIMO WATER CP Price and EPS Surprise

PRIMO WATER CP Price and EPS Surprise | PRIMO WATER CP Quote

Stay tuned! Check later on our full write-up on earnings releases of these stocks.

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