Coca-Cola (KO) Tops Q1 EPS by 3c; Sees Currency Headwind in Q2

Coca-Cola (NYSE: KO) reported Q1 EPS of $0.68, $0.03 better than the analyst estimate of $0.65. Revenue for the quarter came in at $11 billion versus the consensus estimate of $10.81 billion.

GUIDANCE:

Full Year 2023

The company expects to deliver organic revenue (non-GAAP) growth of 7% to 8%. – No Change

For comparable net revenues (non-GAAP), the company expects a 2% to 3% currency headwind based on the current rates and including the impact of hedged positions, in addition to an approximate 1% headwind from acquisitions, divestitures and structural changes. – No Change

The company expects commodity price inflation to be a mid single-digit percentage headwind on comparable cost of goods sold (non-GAAP) based on the current rates and including the impact of hedged positions. – No Change

The company’s underlying effective tax rate (non-GAAP) is estimated to be 19.5%. This does not include the impact of ongoing tax litigation with the IRS, if the company were not to prevail. – No Change

Given the above considerations, the company expects to deliver comparable currency neutral EPS (non-GAAP) growth of 7% to 9% and comparable EPS (non-GAAP) growth of 4% to 5%, versus $2.48 in 2022. – No Change

Comparable EPS (non-GAAP) percentage growth is expected to include a 3% to 4% currency headwind based on the current rates and including the impact of hedged positions, in addition to a slight headwind from acquisitions, divestitures and structural changes. – No Change

The company expects to generate free cash flow (non-GAAP) of approximately $9.5 billion through cash flow from operations of approximately $11.4 billion, less capital expenditures of approximately $1.9 billion. This does not include any potential payments related to ongoing tax litigation with the IRS. – No Change

Second Quarter 2023 Considerations – New

Comparable net revenues (non-GAAP) are expected to include a 3% to 4% currency headwind based on the current rates and including the impact of hedged positions, in addition to an approximate 1% headwind from acquisitions, divestitures and structural changes.

Comparable EPS (non-GAAP) percentage growth is expected to include a 2% to 3% currency headwind based on the current rates and including the impact of hedged positions.

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

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