Sunday, February 6, 2011

The Coca-Cola Company (NYSE: KO): Q4 Earnings Preview 2010

The Coca-Cola Company (NYSE: KO) is scheduled to release its fourth-quarter earnings before the opening bell on Wednesday, February 9, 2011. Analysts, on average, expect the company to report earnings of 72 cents per share on revenue of $9.75 billion. In the year ago quarter, the company reported earnings of 66 cents per share on revenue of $7.51 billion.

The company manufactures, distributes and markets non-alcoholic beverage concentrates and syrups. It also manufactures, or authorizes bottling partners to manufacture, fountain syrups, which it sells to fountain retailers such as restaurants and convenience stores, which use the fountain syrups to produce finished beverages for immediate consumption, or to fountain wholesalers or bottlers, which in turn sell and distribute the fountain syrups to fountain retailers. In addition, it manufactures certain finished beverages, such as juices and juice drinks and water products, which it sells to retailers directly or through wholesalers or other distributors, including bottling partners.

In the preceding third quarter, the Atlanta, Georgia-based company's net income was $2.06 billion, or 88 cents a share, from $1.9 billion, or 81 cents, in the year-earlier quarter. On an adjusted basis, the company earned 92 cents per share in the latest quarter. Revenue grew 5% to $8.43 billion from $8.044 billion. Analysts, on average, expected the company to report earnings of 89 cents per share on revenue of $8.30 billion. 

The company expects currency to have a minimal to low single-digit negative impact on operating income in the fourth quarter. On productivity front, the company is on track to deliver $500 million in annual savings from its initiatives by the end 2011.

Industrywide sales of carbonated soft drinks had been falling in the United States even before the recession slammed the brakes on consumer spending. Some consumers, taking heed of growing awareness of nutritional health, opted for drinks such as bottled water, juice and tea.

However, Coca-Cola is expanding agressively in international market, especially emerging markets, to improve revenue growth. The soft drinks maker is planning to more than double its number of bottling plants in China over the coming decade as part of the group's aim to triple the size of its sales to the country's rapidly emerging middle class. Coke derives more than three-quarters of its revenue from international markets, and is therefore able to offset falling sales in the United States with strong growth in emerging markets like India, China and Brazil. Coca-Cola executives say they expect 60 per cent of the new growth to come from China, India and other emerging markets, with only 15 per cent from developed markets.

Last year, Coca-Cola Co unveiled goals that call for the revenue generated by the company and its bottlers to double to roughly $200 billion by 2020, with profit margins increasing. Coke also said it hopes to more than double the number of soft drink servings it sells to over 3 billion per day by the end of 2020.

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire