Can anyone remember the last time soda king Coca-Cola  (NYSE:KO) tripped over the quarterly earnings hurdle Wall Street set up for it? In truth, it's been 17 quarters since Coke wasn't "it." Can these guys keep the streak alive when third-quarter 2007 numbers come out Wednesday morning?

What analysts say:

  • Buy, sell, or waffle? Sixteen analysts drink the Kool-Aid at Coke (to mangle a metaphor), rating it a buy rather than a hold by 13 to 3.
  • Revenues. Also 13 -- the percentage sales growth expected on Wednesday. Analysts on average predict sales will come in at $7.3 billion.
  • Earnings. Yet profits are only expected to grow 10% to $0.68 per share.

What management says:
We interrupt this Foolish Forecast to bring you breaking news from Coke. Just this morning, we learned that Coca-Cola is teaming up with Italy's illycaffe to develop a ready-to-drink coffee beverage. But while the freshness of the announcement certainly qualifies it for the "breaking" title, I find it difficult to characterize this as news. Searching the Fool's voluminous archives, I discovered that Coke tried something very similar to this more than five years ago, when it called Pepsi's (NYSE:PEP) bottled-coffee bet on Starbucks (NASDAQ:SBUX) by buying into Planet Java bottled coffees.

So, how's that working out for ya, Coke?

What management does:
Coke's operating margin rises to the top of the soda industry's glass, trouncing the operating margins boasted by rivals Pepsi, Cadbury-Schweppes (NYSE:CSG), Kraft (NYSE:KFT), and Jones Soda (NASDAQ:JSDA). Pepsi's margins recently lost some fizz from rising input costs, and we'll see whether the same happens for Coke on Wednesday.

Margins

3/06

6/06

9/06

12/06

3/07

6/07

Gross

64.8%

65.3%

65.8%

66.1%

65.6%

64.9%

Operating

26.8%

27.2%

27.3%

27%

26.8%

26.4%

Net

21.5%

21.9%

22.2%

21.1%

21%

20%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Does this smell like trouble? Not according to the value hounds at Motley Fool Inside Value, where the January 2005 recommendation has netted 50% profits for our members. Reviewing Coca-Cola's earnings report last quarter, Inside Value analyst Michael Olsen argued the contrary, seeing "even more reasons not to be concerned about an investment in Coca-Cola." Michael points to Coke's "fabulous unit growth and continued pricing strength in virtually every region except North America" as signs of the company's success, and predicts that the firm will "continue to post strong growth internationally and will see positive results" here at home."

Personally, I'm a bit more cautious. No, make that a lot more cautious. Coke's shares trade for a whopping 26 times trailing earnings, and 48 times trailing free cash flow, yet the company is only expected to post 9% profit growth on average over the next five years. To this Fool, that makes the shares look ripe for a fall. Then again, The Inside Value crew has managed to outperform the S&P 500 by 15 points on this recommendation -- maybe they know something I don't. (To find out exactly why the folks at Inside Value think this stock has more room to run, grab yourself a free copy of the newsletter as you exit this article.)