Investors are hoping to hear good news from Coca-Cola (KO -0.63%) in just a few days. The beverage titan turned in an unusually weak performance for most of 2020 as the pandemic pressured demand for on-the-go drink purchases. But Coke's management team responded with major strategic shifts, including a push into e-commerce in recent months.

CEO James Quincey and his team will likely highlight wins like those, along with popular innovative releases in niches like sparkling water, teas, and sodas, when the company reports fourth-quarter earnings results while issuing its forecast for the new fiscal year. Let's take a closer look at the announcement set for Feb. 10.

A woman drinking soda from a straw.

Image source: Getty Images.

When the rebound happens

Wall Street is bracing for another weak sales outing because Coke is still hurting from reduced consumer mobility and a lack of crowded sports events and concerts. Sales in the prior quarter declined 6%, with volumes falling 4% compared to PepsiCo's (PEP -0.26%) 1% uptick. Coke's business is more focused on away-from-home consumption, and it lacks Pepsi's large food and snack segment.

KO Revenue (TTM) Chart

KO revenue (TTM) data by YCharts. TTM = trailing 12 months.

Those differences have created a big divergence between the two businesses during the pandemic, with Pepsi hardly losing a step even as Coke's sales plummeted.

Investors are expecting to see another modest revenue decline in this report as sales fall 5%. Executives back in October warned investors to brace for sluggish short-term results as COVID-19 outbreaks threatened new mobility restrictions. We'll find out this week how much of an impact that situation had on the company's organic growth.

Getting more efficient

Coke can't do anything about the timing of the pandemic's end, but management has room to make improvements to the company's finances. Cost cuts helped push operating margin higher last quarter despite the sales slump. Coke is trimming hundreds of underperforming brands, too, so that it can focus on popular products like sparkling waters and zero-sugar sodas.

The company is getting better at developing and releasing these products, and investors should see immediate benefits showing up in metrics like operating margin and strong cash flow. CFO John Murphy told investors recently, "While much has changed with the onset of the pandemic, our focus on converting top-line growth to maximize returns has not."

Staying cautious

Coke won't have a lot of certainty when it comments on 2021. Management declined to issue even a three-month outlook back in October, and the virus is still impacting economic trends around the world.

The good news is that Coke's quarterly reports will get progressively easier from here. The fiscal first quarter showed the beginning of the pandemic's impact as demand plunged in March and April. Those declines mean the company will certainly announce a return to global volume growth this year, even if the fiscal fourth quarter marked its fourth consecutive quarter of losses.

PepsiCo will announce its results a day after Coke, and the consumer staples giant is expected to report a solid 4% organic sales boost for the year while projecting more growth for 2021.

Coke's rebound timing is less certain. Its more-focused portfolio means it will see a sharper rebound once consumer life gets back to normal. But it could be almost another year before those shifts allow the company to start setting sales and profit records again.