What To Watch In Coca-Cola Earnings Report

Coca-Cola (KO) is scheduled to report results of its fiscal fourth quarter before the market open on Wednesday, February 10, with a conference call scheduled for 8:30 am ET. What to watch for:

1. GUIDANCE, COMMENTARY: When Coca-Cola reported Q3 earnings on October 22, 2020, it said "as the coronavirus pandemic continues to evolve, there is uncertainty around its ultimate impact; therefore, the company's full year financial and operating results cannot be reasonably estimated at this time." Management did add some color, though, saying, "For comparable net revenues, the company expects an approximate 3% currency headwind based on the current rates and including the impact of hedged positions. For comparable operating income, the company expects an approximate 6% currency headwind based on the current rates and including the impact of hedged positions. The company's underlying effective tax rate is estimated to be 19.5%."

James Quincey, chairman and CEO of Coca-Cola, said at that time, "Throughout this year's crisis, our system has remained focused on its beverages for life strategy. We are accelerating our transformation that was already underway, shaping our company to recover faster than the broader economic recovery. While many challenges still lie ahead, our progress in the quarter gives me confidence we are on the right path."

2. BARRON'S CALLS STOCK A BUY: Coke is in more than 200 countries and for many decades has had a global reach like no other consumer company, and when the world starts to get back to normal in 2021, the soda giant will be poised to rebound along with it, Andrew Bary wrote in Barron's in late October. As a post-pandemic "reopening" play, however, shares of Coca-Cola seem to be underappreciated, the author contended, adding that the stock has lagged behind PepsiCo (PEP) and Procter & Gamble (PG) this year. More than those consumer peers, Coke benefits from rising living standards in the developing world. And Coke provides exposure to a weaker dollar because the company generates about 75% of its profits outside the U.S., the author noted.

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