Friday, April 9, 2010

The Coca-Cola Company (NYSE: KO): Q1 Earnings Preview 2010

Coca-Cola is scheduled to release Q12010 earnings before the opening bell on Tuesday, April 20, 2010. Analysts, on average, expect the company to report earnings of $0.74 per share in the first quarter with estimates ranging from a low of $0.65 to a high of $0.79 per share. Revenues for the quarter are estimated to be $7.71 billion. In Q12009, the company reported earnings of $0.65 per share on revenue of $7.17 billion.

The Coca-Cola Company manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. It principally offers sparkling and still beverages. According to Beverage Digest, Coca-Cola remained the leading seller of carbonated soft drinks with a a 41.9 percent share of the total market.

In the preceding Q42009, the Atlanta, Georgia-based company reported that its profit jumped 55% to $1.54 billion or $0.66 per share from $995 million or $0.43 per share reported in the same period last year. Revenue rose to $7.5 billion from $7.1 billion. Analysts, on average, expected the company to report earnings of $0.66 per share on revenue of $7.1 billion. Unit case volume -- the measure of all the company's drinks sold worldwide - rose 5%, including a 6% increase overseas. According to the company, there was a significant increase in unit case volume in key emerging markets, with a growth of 29% in China and 20% in India. In developing markets, Brazil reported an increase of 8% and unit case volume grew 4% in Mexico.

Coke has said that its margin may get a boost from its plans to expand and build its infrastructure in countries like India and China. Its productivity initiatives are well on track to achieve the goal of $500 million in annualized savings by year-end 2011. Coca-Cola has realized more than half of the savings by the end of 2009.

The company said in January that overall currency translation will have a slightly positive impact on operating income for 2010.

In February, the Coca-Cola announced that it would buy the North American business of Coca-Cola Enterprises Inc. It also increased its stake in Innocent, Britain’s leading smoothie maker to 58 percent from 18 percent.

Coke will buy back about $1.5 billion of stock in 2010. It also increased its quarterly dividend by about 7% to $0.44 per common share from $0.41 per common share. This is equivalent to an annual dividend of $1.76 per share, up from $1.64 per share in 2009.

In terms of stock performance, Coca Cola shares have lost nearly 1 percent since the beginning of the year.

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