SodaStream International (SODA) will release its quarterly report on Wednesday, and the at-home soda-maker specialist has investors in a near-panic about its future prospects. Not only did preliminary results show that the holiday season didn't go as well as shareholders had hoped, but a new competitive threat from Green Mountain Coffee Roasters (GMCR.DL) and Coca-Cola (KO -0.72%) could introduce a huge new dynamic in the industry. That, in turn, could resurrect formerly dismissed rumors about SodaStream and PepsiCo (PEP 0.12%) potentially entering a partnership to fight back against a Coke/Green Mountain combination.

SodaStream has been a growth darling in recent years, with sales of its home carbonation systems supporting ongoing revenue streams from flavoring and carbon dioxide gas for future use. Yet even as many have dismissed the company as a fad, plans for Green Mountain to release its rival Keurig Cold beverage maker have raised the specter of a disruptive alternative that some users could find preferable to SodaStream's products. Let's take an early look at what's been happening with SodaStream over the past quarter and what we're likely to see in its report.

Source: SodaStream.

Stats on SodaStream

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$167.33 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

What will happen to SodaStream earnings this quarter?
In recent months, analysts have slashed their views on SodaStream earnings, almost eliminating their expectations for a profit in the fourth quarter and cutting almost 30% from their full-year 2014 profit estimates. The stock has plunged, falling 28% since mid-November.

Coming into the quarter, SodaStream had already made investors nervous with some troubling results in its third quarter. Revenue growth of 29% was slower than many had expected, and sales growth in soda flavoring of just 7% worldwide raised concerns that buyers weren't using their machines as much as in the past. Even though an increase of 34% in CO2 refills supported the opposite conclusion, predictions of falling margins sent the stock down about 10%.

But the real damage came last month when SodaStream gave preliminary guidance for the key holiday quarter. The company said that revenue would miss its previous guidance by about 1%, but the hit to the bottom line would be far worse, with net-income expectations falling by more than 20%. Concerns about its product mix again arose in SodaStream's release, and the company's inability to pass through higher costs to consumers showed the margin pressure that the company is facing.

Meanwhile, investors are trying to figure out the net impact on SodaStream of Green Mountain's Keurig Cold and its partnership with Coca-Cola. On one hand, having the soft-drink giant work with Green Mountain in a deal that will give Coca-Cola a 10% stake in the Keurig maker's stock seems like a vote of no confidence against SodaStream's business model. Yet by raising awareness of the ability to make soda at home, the Keurig Cold could actually boost SodaStream sales in the long run if customers decide that SodaStream's products are better and easier to use than those of their Keurig rival.

In that light, the need for SodaStream to seek out a rival partnership with PepsiCo might not be as pressing as some have believed. Indeed, the competitive situation might actually spur Pepsi to make the first move in a prospective partnership, depending on whether it sees Coca-Cola's initiative as a true long-term threat.

In the SodaStream earnings report, focus for now on future guidance for sales, especially of consumables like CO2 and flavorings. If poor trends continue, they'll likely continue to weigh on SodaStream's share price.

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