Market Overview

Preview: Coca-Cola's Earnings

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On Thursday, October 22, Coca-Cola (NYSE: KO) will release its latest earnings report. Decipher the announcement with Benzinga's help.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equates to net income divided by the number of shares outstanding.

Earnings And Revenue

Coca-Cola EPS will likely be near $0.46 while revenue will be around $8.35 billion, according to analysts. Coca-Cola reported a per-share profit of $0.56 when it published results during the same quarter last year. Sales in that period totaled $9.51 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to post earnings in line with the consensus estimate when it reports Thursday, EPS would be down 17.86%. Sales would be down 12.17% from the same quarter last year. Here is how the Coca-Cola's reported EPS has stacked up against analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate 0.40 0.44 0.44 0.56
EPS Actual 0.42 0.51 0.44 0.56
Revenue Estimate 7.18 B 8.28 B 8.85 B 9.48 B
Revenue Actual 7.15 B 8.60 B 9.07 B 9.51 B

Stock Performance

Shares of Coca-Cola were trading at $50.23 as of October 20. Over the last 52-week period, shares are down 8.29%. Given that these returns are generally negative, long-term shareholders are probably upset going into this earnings release.

 

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Posted-In: Earnings