SodaStream International Ltd. Has Plenty to Prove on May 6

A former market darling will have to prove itself in the shadows on Wednesday.SodaStream reports quarterly results, and the investors that are still sticking it out are bracing for a brutal quarter.

"While we are not providing an outlook for 2015 I will say that we have every intention of returning the company to profitable growth in 2016," CEO Daniel Birnbaum said during February's earnings call.

It was a statement that said nothing. It was a statement that said everything. Birnbaum was saying that 2015 would be a lost year, and that starts with Wednesday morning's first quarter report.

Analysts see revenue declining to $100.9 million, 15% below the prior year's quarterly results. They see a profit of $0.03 a share, short of the $0.08 a share that it earned a year earlier and well short of the $0.57 a share that it posted two years earlier.

Those projections could prove to be optimistic. Birnbaum warned back in February that gross profit margins would continue to be under pressure as it clears out discontinued soda makers and flavors. There's also the transition this year as it moves production out of a controversial plant in the disputed West Bank settlement.

The trend is also working against SodaStream. It's coming off a horrendous holiday quarterwhere sales suffered a 25% year-over-year decline, dragged down by a 49% plunge in the Americas. Just about the only things that were moving in the right direction for SodaStream at the time were carbonator refills and its sales in the Asia-Pacific region.

Birnbaum suggested in February that a turnaround at SodaStream isn't realistic until the second half of the year at the earliest. That's yet another reason to fear the worst when Wednesday's report out of the Israeli-based beverage specialist rolls out, but one can also argue that the stock has already discounted a forgettable quarter. It has shed more than half of its value over the past year, so instead of worrying about another bad quarter -- and it should be pretty rough -- the market may latch on to any encouraging nuggets based on new products or the new marketing strategy that finds itself pitching a maker of sparkling water instead of carbonated soda.

The year ahead will be challenging, but SodaStream is making waves by moving away from a controversial plant and emphasizing sparkling water and cocktails over soda through new syrups, machines, and marketing. The grim performance on Wednesday morning should be problematic, but the company's outlook for future success will truly drive the stock.

The article SodaStream International Ltd. Has Plenty to Prove on May 6 originally appeared on Fool.com.

Rick Munarriz owns shares of SodaStream. The Motley Fool recommends Apple and SodaStream. The Motley Fool owns shares of Apple and SodaStream. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.