KO

Coca-Cola Reports Strong First-Quarter Results; Hits 14-Year Highs

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Coca-Cola (KO) reported strong first-quarter 2012 results Tuesday that revealed 5% global volume growth with expansion across every geographic operating group. Though we liked the performance during the period, we see no reason to change our fair value estimate on the firm at this time. The world’s biggest drink maker’s first-quarter net revenue advanced 6%, and the firm leveraged that sales expansion into operating-income growth of 10%. The revenue expansion was driven evenly by concentrate sales and positive pricing. However, currency-neutral operating income grew in line with the pace of sales as the company faced difficult comparisons with respect to commodity costs in the quarter.  Earnings per share came in at $0.89 in the quarter (consensus was at $0.88), with cash … Read more

Coca-Cola Posts Fourth-Quarter Results; Focus Remains on Controlling Costs

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On Tuesday, Coca-Cola (KO) reported solid fourth-quarter results that showed strength across all of its major geographic operating groups. We will be revisiting our valuation model for the concentrate maker, but we don’t expect to make a material change to our $65 fair value estimate. Fourth-quarter net revenues jumped 5% (6% excluding currency), as global volume advanced 3% in the quarter driven by solid international volume expansion of 4% (North America volume grew 1%). Coca-Cola noted that it grew value share in NARTD (non-alcoholic ready-to-drink) beverages across most of its beverage categories. Brand Coca-Cola’s volume increased 3%, with expansion coming from around the world – 33% growth in Thailand, 15% growth in India, 13% growth in China, etc. Worldwide still … Read more

Coca-Cola Posts Strong Third Quarter, But Cautions About Currency Headwinds

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On Tuesday, Coca-Cola (KO) reported strong third-quarter results that showed solid revenue expansion, volume growth, and market share gains. Overall, we liked the performance in the quarter and are maintaining our $67 fair value estimate. Thanks primarily to the acquisition of its bottler group (Coca-Cola Enterprises), net revenue advanced about 45% from the prior-year quarter. Even though the year-over-year comparisons weren’t apples-to-apples, international volume growth was supurb, advancing 5% during the period – brand Coca-Cola led the charge outside of the US. Sparkling beverage volume grew 17% in India, 11% in Argentina, 7% in China and 6% in both Mexico and France.  But even North America saw decent expansion, with organic volume growth of 1% in the period (and year-to-date). … Read more

Ignore Debt Ceiling News, Focus on Corporate Earnings

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Simply put, the United States is not going to default on its debt. In other words, we think any market action resulting from the debt-ceiling issue will be irrelevant in coming months, and resolve itself in due time — as it has with any other crisis. Further, we remain unconvinced that this topic is a legitimate concern for long-term equity investors. The fact that America has a large national debt (and a problem with entitlement programs) is well documented in every history and social-studies textbook in grammar schools across the country; how can this be something that will blindside the markets? We’re not talking about derivatives on complex mortgage instruments here. The debt-ceiling deadline is purely a political issue, one … Read more

Coke Reports Strong Second-Quarter Results

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Coca-Cola (KO) reported second-quarter results Tuesday that showed strong worldwide volume growth of 6% led by expansion outside of the US, namely Eurasia and Africa (up 7%), the Pacific, which includes China (up 7%), and Latin America (up 6%). Demand for the firm’s brand Coca-Cola was particularly impressive in China (up 24%) and Russia (up 17%). Total revenue increased 47% (due primarily to its acquisition of Coca Cola Enterprises’ North American operations), though concentrate sales and currency contributed 6 percentage points of growth, respectively. During the period, Coke Zero delivered double-digit volume growth in North America, while Fanta showed high-single-digit expansion. POWERADE delivered 9% growth and gained share in the sports drink category, while the firm’s NOS Energy brand was … Read more