SodaStream Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and SodaStream (SODA) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Sometimes, simple ideas are best. SodaStream took the simple process of carbonating water and turned it into a huge business, with sales of its soda machines being just the tip of the iceberg for what it hopes is a lifetime of recurring revenue from loyal customers. Let's take an early look at what's been happening with SodaStream over the past quarter and what we're likely to see in its quarterly report on Wednesday.

Stats on SodaStream

Source: Yahoo! Finance.

Will SodaStream put some pop in its stock?
Analysts have grown more optimistic in their assessment of SodaStream, raising earnings-per-share estimates by a couple of pennies and adding $0.13 per share to their full-year 2013 consensus. But the shares have been fizzing higher at a much more explosive rate, with the stock up 50% just since mid-November.

SodaStream has gotten a lot accomplished in recent months. Back in November, the company signed up Campbell Soup (CPB -1.15%) for a licensing deal for SodaStream-compatible flavor versions of its V8 Splash and V-Fusion brands. Moreover, even after having an attack ad against Coca-Cola (KO) and PepsiCo (PEP -0.62%) pulled from the Super Bowl playlist, SodaStream managed to promote it enough to get huge amounts of attention through social media.

But future innovations may be even more interesting. The company expects to release SodaCaps single-serve soda syrups this summer, making it far easier to mix and prepare different flavors than with the current syrup system. If the company can also follow through on attempts to integrate its carbonators to produce refrigerator-dispensed soda water, the ease of use could make SodaStream's popularity rise even faster.

Watch closely in SodaStream's report for the latest figures on consumables, which include carbonator refills and syrups. Those are the true high-margin drivers for SodaStream, and they will also give a good indication as to whether the machines are catching on among users rather than just becoming another fad appliance that sits in the closet.

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