Things You Need to Know Before Keurig's (KDP) Q2 Earnings

Keurig Dr Pepper Inc. KDP is scheduled to release second-quarter 2022 results on Jul 28, before market open. The Zacks Consensus Estimate for second-quarter earnings is pegged at 38 cents, suggesting no change from the year-ago quarter’s reported figure. The consensus mark has also been unchanged in the past 30 days. The consensus mark for quarterly revenues is pegged at $3.39 billion, indicating 7.9% growth from the year-ago period’s reported number.

In the last reported quarter, the company’s earnings were in line with the Zacks Consensus Estimate. We note that its earnings outperformed the Zacks Consensus Estimate by 0.68%, on average, in the trailing four quarters.

Key Factors to Note

Keurig has been gaining from solid portfolio demand and strong market share gains. Sales gains in the second quarter are anticipated to have been driven by continued growth in the Packaged Beverages, Beverage Concentrates and Latin America Beverages segments. Improvement in the away-from-home channel, owing to increased consumer mobility, bodes well.

The company is likely to have retained its strong performance in the Packaged Beverages segment in the second quarter, attributable to growth in CSDs, coconut water, seltzers, teas, apple juice and fruit drinks. Strength in Dr Pepper, Sunkist, Canada Dry, A&W and Squirt CSDs, Vita Coco, Polar seltzers, Snapple, and Mott's have been aiding the segment's sales.

KDP's Packaged Beverages segment has also been gaining from growth in Canada Dry, Dr Pepper, 7UP, A&W, Sunkist and Squirt CSDs, Mott's and Snapple, CORE Hydration, Polar seltzers, Hawaiian Punch and Vita Coco.

However, the company has been witnessing elevated inflation and supply-chain headwinds. Significant input cost inflation, rising transportation costs and supply-chain disruptions are likely to have persisted in the near term. These, along with the adverse impacts of higher marketing investment, acted as deterrents.

Keurig Dr Pepper, Inc Price and EPS Surprise

 

Keurig Dr Pepper, Inc price-eps-surprise | Keurig Dr Pepper, Inc Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Keurig this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 
Keurig currently has a Zacks Rank #4 (Sell) and Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat.

Corteva CTVA has an Earnings ESP of +8.12% and it currently sports a Zacks Rank #1. CTVA is anticipated to register top and bottom-line growth when it reports the second-quarter 2022 results. The Zacks Consensus Estimate for Corteva’s quarterly revenues is pegged at $6.2 billion, indicating an improvement of 9.4% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Corteva’s bottom line has been unchanged in the past 30 days to $1.46 per share. However, the consensus estimate for CTVA suggests growth of 4.3% from the year-ago quarter’s reported figure. CTVA has delivered an earnings beat of 22.3%, on average, in the trailing four quarters.

Lamb Weston LW currently has an Earnings ESP of +0.99% and a Zacks Rank #2. LW is likely to register top and bottom-line growth when it reports the second-quarter 2022 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.1 billion, which suggests growth of 6% from the figure reported in the prior-year quarter.

However, the Zacks Consensus Estimate for Lamb Weston’s quarterly earnings has moved up by a penny in the past 30 days to 51 cents per share, suggesting an increase of 15.9% from the year-ago quarter’s reported number. LW has delivered an earnings beat of 18.1%, on average, in the trailing four quarters.

Hershey HSY currently has an Earnings ESP of +1.84% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports the second-quarter 2022 numbers. The Zacks Consensus Estimate for HSY’s quarterly revenues is pegged at $2.2 billion, which suggests growth of 11.7% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for Hershey’s quarterly earnings has moved up by a penny in the past 30 days at $1.67 per share, suggesting a 13.6% decline from the year-ago reported number. HSY has delivered an earnings beat of 7.9%, on average, in the trailing four quarters.

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