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What to Expect from Coca-Cola’s Q3 2018 Results

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Oct. 25 2018, Updated 1:28 p.m. ET

Stock movement ahead of results

Coca-Cola (KO) is scheduled to announce its third-quarter results on October 30. The beverage giant’s stock rose 1.9% on a YTD (year-to-date) basis on October 24. The S&P 500 Index was down 0.7% on a YTD basis on the day.

Coca-Cola stock has risen 3.2% since the company announced its second-quarter results in July, which exceeded analysts’ expectations. However, the company’s top line declined due to the impact of refranchising its bottling operations. Excluding the impact of structural headwinds, Coca-Cola generated organic revenue growth of 5.0% in the second quarter.

On October 24, the stock prices of Coca-Cola’s peers PepsiCo (PEP) and Monster Beverage (MNST) fell 5.8% and 17.8%, respectively, on a YTD basis. In contrast, Keurig Dr Pepper (KDP) stock has risen 53.1% this year.

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On an acquisition spree

Coca-Cola (KO) announced some key acquisitions after its second-quarter results. In August, the company purchased a minority interest in BodyArmor to strengthen its position in the sports beverage market. Coca-Cola announced the $5.1 billion acquisition of Costa, which could help the company capture growth prospects in the hot beverage market.

In September, Coca-Cola announced the purchase of kombucha maker Organic & Raw Trading Company. According to Reuters, Coca-Cola is on track to fully acquire Nigeria’s Chi Limited by early 2019. In 2016, Coca-Cola acquired a 40.0% stake in Chi Limited, a dairy, juice, and snack company. Coca-Cola’s back-to-back acquisitions reflect the company’s strategy to seek growth in the healthier beverage space as consumers shy away from soda.

In this series on Coca-Cola’s upcoming third-quarter results, we’ll discuss the company’s sales and earnings expectations. We’ll also look at the company’s volumes and analysts’ recommendations.

In the next part, we’ll look at Coca-Cola’s sales expectations.

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