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Coke Versus Pepsi: Which Beats Low Q1 Earnings Expectations?

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Coke Versus Pepsi: Which Beats Low Q1 Earnings Expectations?
  • The first-quarter earnings reporting season kicks into high gear this week.
  • Highlights will include the latest results from two beverage giant rivals.
  • Wall Street analysts are looking for earnings declines from both of them.

The new earnings season is underway, and among the highlights this week will be the first-quarter results from rival beverage giants The Coca-Cola Co (NYSE: KO) and PepsiCo, Inc. (NYSE: PEP).

Wall Street analysts expect soft results from each of them, as they have faced such headwinds as a strong U.S. dollar and weakness in emerging markets, as well as an increasingly health-conscious American consumer. Consensus forecasts call for modest declines on the top and bottom lines from each of them.

Below is a quick look at what analysts expect from these two reports, followed by a glance at some of the other most prominent earnings reports out of the many expected this week.

Coca-Cola

Wall Street's consensus forecast for this maker of Sprite, Fanta, Dasani, Minute Maid and many other beverages calls for earnings per share (EPS) to have slipped four cents from the same period of last year to $0.44. The consensus of 39 Estimize respondents sees a penny per share more, the same as the Wall Street estimate of 60 days ago, though Wall Street has underestimated EPS in the past few quarters.

Estimize predicts that revenue for the quarter will total around $10.26 billion, which would be less than 4 percent lower than in the year-ago period. Wall Street is slightly more optimistic, with its consensus forecast of $10.28 billion. Coca-Cola is scheduled to report before the opening bell on Wednesday.

Related Link: Will Intel And Microsoft Top Earnings Expectations Again?

PepsiCo

When this iconic beverage and snack maker shares its results early Monday, the Wall Street forecast is that it will post EPS of $0.81 for the most recent quarter. That would be down from $0.83 per share year-over-year. The consensus expectations of 54 Estimize respondents have EPS the same as a year ago. Note that both Wall Street and Estimize have underestimated earnings in most recent periods.

Revenue for the three months that ended in March will total $11.88 billion, which would be less than 3 percent lower year-over-year, if the Wall Street analysts are correct. The Estimize estimate is nearly the same. And note that it would be the lowest quarterly revenue results in the past two years.

And Others

Other companies that Wall Street analysts expect to show at least some earnings growth when they report this week include Alphabet (Google), General Motors, Intel, Johnson & Johnson, McDonald's, Microsoft, Southwest Airlines, Starbucks and Verizon. On the other hand, EPS at American Airlines, American Express, Caterpillar, General Electric, Goldman Sachs, IBM, Netflix, Philip Morris and Yahoo will be smaller than a year ago, if the consensus forecasts are correct.

In the following week, the new earnings season ramps up, with results expected from Apple, AT&T, Boeing, Comcast, eBay, Eli Lilly, Exxon Mobil, Facebook, Ford, Marriott, Procter & Gamble, 3M, Xerox and many more.

At the time of this writing, the author had no position in the mentioned equities.

 

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