Investors have been happy with Coca-Cola's (NYSE:KO) last few earnings reports for a change. The new optimism comes from accelerating sales growth driven by core innovations like Coke Zero and successful pushes into new growth areas around coffee, energy drinks, and sparkling water.

Those modest wins set the stage for what's likely to be a closely followed earnings report this week. On Friday, Oct. 18, the consumer staples giant will reveal how well demand held up during the seasonally strong summer months in a report that might also clear up whether Coke will see a bigger market share challenge from PepsiCo (NASDAQ:PEP) over the coming quarters.

Let's look at three key points.

1. Organic sales

Coke got off to a strong start to its fiscal year as organic sales shot up 6% over the last six months on healthy demand in Asia and Europe and big gains in its water and energy drink segment. That increase outpaced the 4% growth that CEO James Quincey and his team had issued for the full year, and so they lifted their 2019 outlook. Yet there are good reasons to expect the expansion pace to slow back down slightly this quarter while continuing to reflect market share growth.

A woman drinks sparkling water from a glass.

Image source: Getty Images.

Specifically, look for organic sales gains of around 5%, compared with the 3% that Pepsi is managing in its beverage division these days. Beyond that headline number, investors will want to see price-driven gains that nevertheless still include modest increases in sales volumes. For context, Pepsi's volumes fell 1% in the most recent quarter as prices increased 4%.

2. Pricing trends

Costs are rising on everything from labor to aluminum to transportation, and Coke has so far had no problem passing along those increases to consumers. Smaller packaging is also boosting the average price per serving while proving popular with soda fans who are looking to consume fewer calories.

You can see the impact of these moves most clearly in the U.S. market where operating income rose 4% last quarter to keep pace with sales growth despite a slight decline in volume. Coke's efficient operation allows it to squeeze increasing amounts of profit from a flat industry, and investors are likely to see a similar situation play out in the fiscal third quarter.

3. The growth forecast

Pepsi followed Coke's lead in early October when it announced an increase in its growth outlook while still predicting a slight earnings decline for the year. As it stands heading into this report, Coke is calling for sales to rise 5% in 2019 (up from the initial 4% target) and core earnings ranging from a 1% decline to a 1% uptick.

Executives hiked that core sales outlook back in July while also boosting their operating cash flow prediction by $500 million to $8.5 billion. Investors will find out on Friday whether positive momentum over the last few months solidified those rising expectations. If they did, it's likely Coke's management will have some bullish early comments around the strength of the business as it closes out 2019 and approaches a new fiscal year.

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