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Will Coca-Cola Bottling (COKE) See Earnings Growth in Q3?

Coca-Cola Bottling Co. Consolidated COKE is scheduled to report third-quarter 2017 financial numbers on Nov 7.

This large independent bottler of The Coca-Cola Company KO has an encouraging strategy to grow both organically and through the acquisition of additional manufacturing and distribution territory.

In the first half of 2017, Coca-Cola Bottling reported net sales of $2.03 billion, up 38.8% year over year primarily on acquisitions and a 2.3% hike in comparable net sales on 1.9% rise in comparable equivalent unit case volumes. The trend is expected to continue in the third quarter as the company usually experiences higher sales in the second and third quarters of the year.

The sparkling product portfolio and the higher margin still product range drove comparable net sales. Sparkling product comparable volumes grew 1% year over year while that of still products increased 4.1% in the first six months of 2017. This is expected to continue in the to-be-reported quarter.

However, higher expenses (such as expansion transaction and amortization expenses) might dent the company’s bottom line. Notably, the stock saw dismal trading in the third quarter, with the stock losing 5.8%, compared to the industry’s 0.6% decline.

Peer Releases

Coca-Cola reported better-than-expected results in third-quarter 2017. Lower SG&A expenses (down 20%), higher gross margin (up 170 basis points or bps) and higher operating margin (up 404 bps) helped the company come up with better numbers. However, Coca-Cola's total sales dropped 15%, marking the 10th consecutive quarterly decline.

PepsiCo, Inc. PEP reported mixed third-quarter 2017 (ending Sep 9) results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. Nonetheless, this is the sixth consecutive quarter of a positive earnings surprise.

Dr Pepper Snapple Group Inc.’s DPS third-quarter 2017 adjusted earnings per share of $1.10 missed the Zacks Consensus Estimate by 4.3%. Earnings were down 6% on a year-over-year basis owing to the recent hurricanes in the United States, earthquakes in Mexico and a previously disclosed write-off of prepaid resin inventory. Net sales of $1.74 billion missed the Zacks Consensus Estimate by 1.7% but rose 4% year over year.

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