Coca-Cola (NYSE:KO) announces its next round of earnings this Wednesday, July 21. Here is Benzinga’s everything-that-matters guide for this Wednesday’s Q2 earnings announcement.
What Are Earnings, Net Income, And Earnings Per Share?
Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.
Earnings And Revenue
Coca-Cola earnings will be near $0.55 per share on sales of $9.25 billion, according to analysts. Coca-Cola EPS in the same period a year ago totaled $0.42. Revenue was $7.15 billion.
Why Analyst Estimates And Earnings Surprises Are Important
Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the “consensus estimates”; these consensus estimates can have a significant effect on a company’s performance during an earnings release.
When a company posts earnings or revenue above or below a consensus estimate, it has posted an “earnings surprise”, which can really move a stock depending on the difference between actual and estimated values.
The Wall Street consensus estimate for earnings would represent a 30.95% increase for the company. Revenue would be up 29.37% on a year-over-year basis. The company’s reported EPS has stacked up against analyst estimates in the past like this:
| Quarter | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 |
|---|---|---|---|---|
| EPS Estimate | 0.50 | 0.42 | 0.46 | 0.40 |
| EPS Actual | 0.55 | 0.47 | 0.55 | 0.42 |
| Revenue Estimate | 8.61 B | 8.63 B | 8.35 B | 7.18 B |
| Revenue Actual | 9.02 B | 8.61 B | 8.65 B | 7.15 B |
Stock Performance
Shares of Coca-Cola were trading at $55.73 as of July 19. Over the last 52-week period, shares are up 15.76%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.
Do not be surprised to see the stock move on comments made during its conference call. Coca-Cola is scheduled to hold the call at 08:30:00 ET and can be accessed here.
