Coca-Cola (NYSE:KO) stock hasn't participated in the stock market rally since early 2020, but that trend might start shifting soon. The beverage giant is set to announce its latest operating results in just a few days.

The good news is that Coke's business likely improved compared to a year earlier when COVID-19 was still depressing consumer mobility. And cash flow and profit results should be strong. But the big question is how badly resurging virus case rates stalled its momentum in key markets around the world.

Let's take a closer look at the announcement set for Oct. 27.

Two people drinking sodas on a boat.

Image source: Getty Images.

Sales will jump

Coca-Cola isn't going to announce a repeat of last quarter's sales performance, which was marked by soaring sales volumes, year-over year, as economies emerged from social distancing restrictions. It is going up against a harder year-ago period, after all, and COVID-19 outbreaks sparked new movement restrictions around the world.

Still, most investors who follow the stock are looking for sales to rise 13% compared to the prior quarter's 42% spike. The key growth metric to watch is market share. CEO James Quincey said the company in the second quarter returned to its pre-pandemic routine of steadily winning share across the beverage industry. Ideally, that momentum wasn't completely halted by virus outbreaks through late September.

Margins and cash

The outlook is brighter on Coke's financial metrics. While earnings aren't going to spike as quickly as they did in Q2, profits should still improve thanks to the volume rebound and continued cost cuts through the summer months. Coke should also benefit from a shift toward premium beverages and serving sizes in today's free-spending economic environment.

KO Operating Margin (TTM) Chart

KO Operating Margin (TTM) data by YCharts

Look for operating margin to climb toward 30% of sales, or about double PepsiCo's performance. That's a key advantage to Coke's more targeted portfolio and its dominance when it comes to on-the-go beverages at places like restaurants and sporting events. That financial strength also helps support Coke's rising dividend and aggressive stock buyback spending. 

Looking ahead

Executives lifted their 2021 outlook in early July while warning that new COVID-19 pressure might threaten that positive momentum. The big question is whether new outbreaks, and the consumer mobility issues they create, have Coke feeling less bubbly about the rest of 2021.

Heading into Wednesday's report, management is looking for organic sales to rise by between 12% and 14%, with slightly faster earnings gains. Those forecasts might hold steady or even decline due to unfavorable changes in the selling environment this past quarter.

Investors shouldn't worry much about the demand slowdown that was likely a temporary impact of the pandemic. And rising inflation will soon be offset by higher prices. Still, Coke's short-term outlook might sound less bullish than shareholders heard back in early July, even though the consumer staples titan is primed for improving growth and profitability trends in 2022 and beyond.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.