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COCA-COLA RISES 4.2% ON UPBEAT EARNINGS

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COCA-COLA RISES 4.2% ON UPBEAT EARNINGS

Feb 10 2015, 3.55pm GMT

STOCK.com

Coca-Cola released earnings above expectations and saw markets rise in the first hour of U.S trading.

Analysts had forecast Coca-Cola earnings of 42 cents a share down from 46 cents a share a year earlier, alongside a decline in total sales from $11 billion a year ago to $10.8 billion for the fourth quarter.

However, with better than forecast North American sales 2% higher at $5.37 billion in the fourth quarter, the drinks maker gained on nearly half of total sales.

With a health kick happening in this market, sales were due to fall, but analysts reported that less soda was being drunk but it was costing more.

  • Coca-Cola net operating revenue fell 2% to $10.87 billion; excluding the impact of structural items, comparable currency neutral net revenues grew 4%.
  • Global volume growth of 2% for the full year and 1% in the quarter.
  • Fourth quarter reported EPS was $0.17; comparable EPS was $0.44 impacted by foreign exchange rates with Venezuela and a write-down on concentrate sales.

Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company rallied investors by promoting the company’s future 2020 plans announced last year in terms of productivity and refranchising. He said this year that the company has made “solid progress on the implementation of the strategic initiatives we announced in October as evidenced by some early positive signs in the quarter. We remain resolutely focused on accelerating growth and taking advantage of opportunities to solidify our position in key markets and categories.”

Coca-Cola’s change in direction has reaped rewards as Tuesday’s report signifies a growth of 1% in global sparkling beverage volume in both the quarter and full year, driven by growth in brand Coca-Cola, Sprite and Fanta. Brand Coca-Cola was up 1% in the quarter and grew slightly for the full year, rounding to even. Global still beverage volume did even better though, growing 2% in the quarter and 4% for the full year driven by growth in ready-to-drink tea, sports drinks and packaged water. Volume growth in these beverage categories was partially offset by a decline in juice and juice drinks, due in part to price increases to cover higher input costs.

Revenues per region brought in fairly consistent results; up 5% in the Eurasia and Africa Group, Europe increased by 2%, Latin America was up by 14% and Asia Pacific volume declined 1% in the quarter, North America grew 5%.

Coca-Cola expects full-year comparable currency neutral EPS growth to be mid single digits, roughly in line with the growth rate in 2014. Whilst for the first quarter of 2015, the estimate due to the currency impact will be an approximate 6 point headwind on net revenues and an approximate 8 point headwind on profit before tax.

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