Cott (COT) reports Q1 loss, beats revenue estimates

Cott (COT) reported quarterly loss of $0.14 per share versus the Zacks Consensus Estimate of a loss of $0.04. This compares to a loss of $0.02 per share a year ago. These figures are adjusted for one-time items.

This quarterly report represents an earnings surprise of -250%. A quarter ago, the maker of soft drinks, juices, teas, flavored waters, and energy drinks was expected to post earnings of $0.03 per share when in fact the company delivered earnings of $0.03, which was no surprise at all.

The company has failed to beat consensus earnings per share estimates over the past four quarters.

Cott, which belongs to the Zacks Beverages – Soft Drinks industry, posted revenues of $574.10 million for the quarter ended March 2019, topping the Zacks Consensus Estimate by 0.86%. This compares to revenues of $560.80 million a year earlier. The company has topped the consensus revenue estimate three times over the last four quarters.

The sustainability of current share price movements based on recently released data and future earnings expectations will depend primarily on management’s commentary following the earnings conference call.

Cott shares have gained about 9.3% since the beginning of the year, while the S&P 500 has gained 16.6%.

What’s next for Cott?

Even though Cott has underperformed the market this year, investors are wondering: What’s next for the stock?

There are no easy answers to this key question, but one reliable indicator that can help investors address this is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revisions trend for Cott was unfavorable. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. As such, the stock is expected to underperform the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the upcoming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is $0.08 on $608.69 Million in revenue for the coming quarter and $0.33 on $2.40 Billion in revenue for the current fiscal year.

Investors should be aware that the industry outlook can also have a significant impact on stock performance. In terms of the Zacks Industry Rank, Beverages – Soft Drinks currently ranks in the bottom 30% of more than 250 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

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