Coca-Cola (KO 2.14%) will reveal its first-quarter earnings results Tuesday April, 15 2014 in what could be a disappointing quarterly report. In the months since its worse-than-expected annual report was released, there has been a torrent of negative headlines. U.S. soft drink sales are plunging, multiple countries are considering soda taxes, and the company's compensation plan has been attacked for being too generous to employees. However, investors can count on at least one bright spot when the quarterly results are released. Here is what to expect when Coca-Cola reveals its results.

Case volume
Soft drink volume has been declining in the U.S. for many years as consumers switch to other beverages. Nielsen reports that Coca-Cola's U.S. diet soda sales declined 5.8% in the four-week period ending in mid-March. Excluding the diet soda decline, Coca-Cola's soft drink sales actually increased 2.3%. Coca-Cola's North American beverage revenue was flat in the fourth quarter of 2013. Given that Diet Coke is the no. 2 soft drink brand in the U.S., plunging diet soft drink sales could cause North American revenue to come in lower than it was last quarter.

Investors should expect North America first quarter volume to be bad; the only question is how bad. It will probably be worse than the first quarter of 2013, when case volume grew 1% and revenue declined 1%; diet drink volume has started to nosedive since then. Anything in positive territory would be a good sign.

Investors should also look for management's strategy to deal with declining interest in diet soda. Will the company cut prices to bolster volume or raise prices to offset volume declines? The latter course of action is in the best interest of the brand, as loyal Diet Coke drinkers will not mind paying ten cents more for the drink and discounting may tarnish the brand's image.

Per capita consumption
Long-time Coca-Cola investors have a strong affinity for one key report that is released each year around this time: Per capita consumption of Coca-Cola beverages. Declining U.S. volumes, soda taxes in Mexico, and rising obesity rates in developed nations are not enough to stop Coca-Cola from growing per capita consumption of its beverages. The world

Courtesy Coca-Cola

drank more Coke in 2002 than in 1992, and in 2012 than in 2002. In all likelihood, the world will drink more Coke in 2022 than did in 2012. This is the key reason Coca-Cola investors have no qualms about owning a company facing declining volumes in the U.S.

Look for management's comments on emerging markets like Brazil, India, and China. Emerging markets are Coca-Cola's last frontier. As these countries build out their middle class, more than a billion potential Coke drinkers will be added to the global economy. As a result, investors can expect worldwide Coca-Cola consumption to grow, even as U.S. volume falls.

Compensation
On March 7th, Coca-Cola filed its annual proxy statement outlining its compensation plan. At least one investor did not like what he saw when he read the filing. Value investor David Winters criticized what he considered an overly dilutive plan that could transfer billions from shareholders' pockets to Coca-Cola executives. Coca-Cola's board of directors fired back at Winters, arguing that the plan is consistent with that of previous years. A great post by Shane Parrish explains that the plan's merits fall somewhere between the two extremes.

The biggest concern shareholders should have about the plan is that it awards stock options to thousands of mid-level executives who are not in a position to have a large impact on shareholder value. Look for management to discuss any possible changes to the compensation plan to alleviate shareholder concerns, or at least for a strong defense of the plan as it stands.

Bottom line
Investors should expect a difficult quarter for Coca-Cola. North American case volume will almost certainly grow slower than it did a year ago and could decline. However, expect worldwide volume to grow as emerging markets add to Coca-Cola's customer base. Finally, expect management to defend its compensation plan, but look for any signs that the company is willing to make adjustments to address shareholder concerns. This quarter will not be a terrific one, but any bright spots could put the stock price on a positive trajectory in 2014.