Here’s What Coke’s Q3 Earnings Could Mean for Pepsi
Coca-Cola (NYSE:KO) released disappointing third-quarter earnings Tuesday, with revenues falling short of analysts’ expectations due in part to a stronger U.S. dollar and market shifts in China and Europe. Coke, which does the majority of its sales overseas, says that while the effects of the currency shifts are beyond its control, one factor that hurt the fiscal quarter’s performance was an increasing preference of consumers in Asian and European markets for lower-priced beverage options.
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For one thing, PepsiCo believes it will not be as affected by international slowdowns as was Coke. The company has recently made aggressive efforts to improve its North American business and has increased market spending for core brands like Pepsi-Cola. Analysts believe the campaigns are paying off and that Wednesday’s earnings reports will confirm as much.
There was one factor in Coke’s reports, though, that Pepsi does hope to share. Coke saw its worldwide sales volume rise 4 percent, an indication that across the globe consumers are drinking more soft drinks. If that is true, Pepsi can anticipate benefiting from that trend.
Shares of PepsiCo saw slight gains during Tuesday trading ahead of its expected strong quarterly earnings to be announced Wednesday.