Will SodaStream Earnings Flatten Coke and Pepsi?

SodaStream (NASDAQ: SODA  ) will release its quarterly report on Wednesday, and investors are preparing for the possibility of something they haven't seen much of lately: falling earnings.

Yet in the long run, SodaStream earnings appear poised to keep soaring, raising questions about whether the home-carbonation system maker will eventually start cannibalizing the businesses of soda giants Coca-Cola (NYSE: KO  ) and PepsiCo (NYSE: PEP  ) .

SodaStream jumped onto a kitchen appliance trend, but it has a much different marketing angle from those that home coffee brewers use. SodaStream promises not only cost-effective soda but also healthier offerings that cut down on environmental waste. Read more about KO.

Coca-Cola: Bottle is Half Full

The Coca-Cola Company (KO), the world largest soft-drink maker, reported its third quarter (3Q) financial results for fiscal year 2013 (FY13) on October 16. The company’s revenues are typically the highest in the summer months – or the second and third quarters – when warm weather acts as a demand driver for soft drink sales.

In the latest quarter ended September 30, 2013, Coca-Cola reported an EPS of $0.54, an 8% Year-over-Year (YoY) increase from the same quarter last year. The EPS figure was in line with analysts’ estimates, signaling strong fiscal management, despite a YoY decline in overall revenues.

Total net revenues for the quarter came in at $12.03 billion, and missed analyst expectations of $12.05 billion by just 0.19%. Reported revenues declined 3% YoY, mainly due to restructuring charges in its Philippines and Brazil operations. After excluding restructuring costs, and accounting currency fluctuations, global revenues actually increased 4%. read more about Coca-Cola.

P&G: Lafley’s There, but Not There Yet!

The growth of consumer goods companies like P&G is a function of product innovation, which requires the management to take risks and experiment with new products.

P&G has discontinued providing quarterly guidance under Lafley’s leadership, which indicates that the company is moving away from rigid targets and towards more freedom in the decision-making process. Stopping quarterly guidance will allow the management to take greater risks, as there will be little or no pressure to meet the guidance targets released to investors, as was the case before. With the room created by discontinuing guidance, the company can also increase its marketing expenditures to compete better against rivals. However, this is just a step towards the long-term restructuring required in P&G.

Increases in marketing investments have impacted consumer goods companies positively in the past, as is evident from the following case studies of PepsiCo (PEP), Coca-Cola (KO) and P&G. read more about Coca-Cola.

Cranberry Sprite: Too Little, Too Late?

Recently, beverage giant Coca-Cola (NYSE: KO  ) announced the launch of Sprite Cranberry, representing the first new Sprite flavor since 2005. The distribution will only last through the holiday season. With the soda industry facing headwinds from the healthy lifestyle  movement, you may ask, "Is this too little and too late?" read more.

Coca-Cola vs. PepsiCo Who Got More Fizz?

When considering dividend stocks, investors seek fundamentally strong companies that pay out stable and incremental dividends without cutting corners in times of crisis. The sustainability of dividend payments is measured usually by comparing a few important metrics between different companies.

Coca-Cola (KO) and PepsiCo (PEP), the two largest global beverage companies, have traditionally been considered strong dividend stocks. Both companies are included in the highly regarded S&P Dividend Aristocrats List, and their stock prices are resilient enough to hold up even during a financial downturn.

Even though the two are quite closely matched in terms of dividend yields, debt ratios, and revenue growth, we will be digging deeper to find out which of the two companies is in a better position to pay dividends on a sustained basis. Read more.

Getting Harder for the Soft Drink Industry

The first carbonated soft drink was created by accident in 1886. It led to the eventual creation of Coca-Cola (KO) – a product which is now synonymous with the $520 billion global non-alcoholic beverage industry. Since then, a countless number of soft drinks has been invented and re-invented, but the most dominant recent trend in the industry is a move away from the traditional, sugary, carbonated beverages to non-carbonated and low-calorie versions of the original.

The use of sweeteners in carbonated beverages has been a topic of intense debate for quite some time. While beverage companies maintain their stance that the type and quantity of sweetener being used in their beverages, high fructose corn syrup, is not harmful to human health, numerous studies have shown a direct link between obesity and the consumption of sugary beverages. And even though beverage companies are sticking to their guns on the use of natural and artificial sweeteners, they are simultaneously looking at ways to cut down on harmful ingredients in their products. Read more.