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Coca-Cola Co. (KO) Reports In-Line Q1 EPS, Sales

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April 15, 2014 7:34 AM EDT

Coca-Cola Co. (NYSE: KO) reported Q1 EPS of $0.44, in-line with the analyst estimate of $0.44. Revenue for the quarter came in at $10.58 billion versus the consensus estimate of $10.61 billion.

  • Global unit case volume grew 2%. Coca-Cola International volume grew 2% while North America’s volume was even.
  • Reported net revenues declined 4%. Excluding the impact of structural changes, comparable currency neutral net revenues grew 2%.
  • Reported operating income declined 1%. Excluding the impact of structural changes, comparable currency neutral operating income grew 7% while we accelerated investments behind our brands.
  • Reported EPS was $0.36, down 6%, and comparable EPS was $0.44, down 4%. Comparable currency neutral EPS increased 5%.
  • Gained both global volume and value share in nonalcoholic ready-to-drink beverages, with value share gains ahead of volume share gains.
  • As part of the expansion of our productivity and reinvestment program announced in February, we are on track to invest an incremental $400 million in 2014 media initiatives in order to accelerate top-line growth.
  • Cash from operations was $1.1 billion.

Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company said, “Our growth momentum is steadily improving in line with our expectations, as we delivered sequentially stronger volume growth of 2% in the quarter while gaining global volume and value share in nonalcoholic ready-to-drink beverages. While we are making meaningful progress across our five strategic priorities to restore our momentum, we are firmly committed to further advancing our growth trajectory through 2014 as we are accelerating marketing investments in our brands and focusing relentlessly on marketplace execution in partnership with our bottling partners around the world. In the near term, we are committed to delivering on our performance goals and generating increased shareowner value through improved productivity efforts and targeted investments. All of us at The Coca-Cola Company remain confident in our ability to deliver on our strategies while further strengthening our foundation for profitable and sustainable long-term growth toward our 2020 Vision.”

For earnings history and earnings-related data on Coca-Cola Co. (KO) click here.

THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(UNAUDITED)
(In millions except per share data)
Three Months Ended

March 28,2014

March 29,2013

 % Change1
Net Operating Revenues$10,576 $11,035 (4)
Cost of goods sold4,083 4,324 (6)
Gross Profit6,493 6,711 (3)
Selling, general and administrative expenses3,989 4,182 (5)
Other operating charges128 121 6
Operating Income2,376 2,408 (1)
Interest income123 116 6
Interest expense124 102 21
Equity income (loss) — net71 87 (19)
Other income (loss) — net(241) (165) (46)
Income Before Income Taxes2,205 2,344 (6)
Income taxes579 575

0

Consolidated Net Income1,626 1,769 (8)
Less: Net income (loss) attributable to noncontrolling interests7 18 (57)
Net Income Attributable to Shareowners of The Coca-Cola Company$1,619 $1,751 (8)
Diluted Net Income Per Share2$0.36 $0.39 (6)
Average Shares Outstanding — Diluted24,464 4,530

1 Certain growth rates may not recalculate using the rounded dollar amounts provided.

2 For the three months ended March 28, 2014 and March 29, 2013, basic net income per share was $0.37 for 2014 and $0.39 for 2013 based on average shares outstanding — basic of 4,401 million for 2014 and 4,455 million for 2013. Basic net income per share and diluted net income per share are calculated based on net income attributable to shareowners of The Coca-Cola Company.

THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(UNAUDITED)
(In millions except par value)

March 28, 2014

 December 31,2013
ASSETS
Current Assets
Cash and cash equivalents$9,131 $10,414
Short-term investments6,918 6,707
Total Cash, Cash Equivalents and Short-Term Investments16,049 17,121
Marketable securities3,384 3,147
Trade accounts receivable, less allowances of $63 and $61, respectively5,233 4,873
Inventories3,357 3,277
Prepaid expenses and other assets3,029 2,886
Total Current Assets31,052 31,304
Equity Method Investments10,283 10,393

Other Investments

2,844 1,119
Other Assets4,655 4,661
Property, Plant and Equipment — net14,860 14,967
Trademarks With Indefinite Lives6,745 6,744
Bottlers' Franchise Rights With Indefinite Lives7,403 7,415
Goodwill12,343 12,312
Other Intangible Assets1,104 1,140
Total Assets$91,289 $90,055
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable and accrued expenses$9,959 $9,577
Loans and notes payable18,250 16,901
Current maturities of long-term debt1,551 1,024
Accrued income taxes296 309
Total Current Liabilities30,056 27,811
Long-Term Debt18,640 19,154
Other Liabilities3,414 3,498
Deferred Income Taxes6,257 6,152
The Coca-Cola Company Shareowners' Equity

Common stock, $0.25 par value; Authorized — 11,200 shares; Issued — 7,040 and 7,040 shares, respectively

1,760 1,760
Capital surplus12,332 12,276
Reinvested earnings61,937 61,660
Accumulated other comprehensive income (loss)(3,594) (3,432)
Treasury stock, at cost — 2,648 and 2,638 shares, respectively(39,781) (39,091)
Equity Attributable to Shareowners of The Coca-Cola Company32,654 33,173
Equity Attributable to Noncontrolling Interests268 267
Total Equity32,922 33,440
Total Liabilities and Equity$91,289 $90,055

THE COCA-COLA COMPANY AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(UNAUDITED)
(In millions)
Three Months Ended

March 28, 2014

 March 29,2013
Operating Activities
Consolidated net income$1,626 $1,769
Depreciation and amortization473 473
Stock-based compensation expense39 47
Deferred income taxes13 157
Equity (income) loss — net of dividends(65) (77)
Foreign currency adjustments280 184
Significant (gains) losses on sales of assets — net— (1)
Other operating charges84 74
Other items46 36
Net change in operating assets and liabilities(1,430) (2,184)
Net cash provided by operating activities1,066 478
Investing Activities
Purchases of investments(4,369) (3,506)
Proceeds from disposals of investments2,595 2,225
Acquisitions of businesses, equity method investments and nonmarketable securities(85) (28)
Proceeds from disposals of businesses, equity method investments andnonmarketable securities— 690
Purchases of property, plant and equipment(449) (498)
Proceeds from disposals of property, plant and equipment68 35
Other investing activities27 (136)
Net cash provided by (used in) investing activities(2,213) (1,218)
Financing Activities
Issuances of debt10,926 12,585
Payments of debt(9,567) (10,065)
Issuances of stock191 417
Purchases of stock for treasury(875) (1,523)
Dividends— —
Other financing activities(470) 21
Net cash provided by (used in) financing activities205 1,435
Effect of Exchange Rate Changes on Cash and Cash Equivalents(341) 25
Cash and Cash Equivalents

Net increase (decrease) during the period

(1,283) 720

Balance at beginning of period

10,414 8,442

Balance at end of period

$9,131 $9,162

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