Coca Cola (NYSE: KO) reported Q1 EPS of $0.45, $0.01 better than the analyst estimate of $0.44. Revenue for the quarter came in at $10.3 billion versus the consensus estimate of $10.28 billion.

“We continue to transform The Coca-Cola Company into a company that is focused on our core value creation model of building strong brands, enhancing customer value and leading our franchise system,” said Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company. “Amidst a challenging global macro environment, the continued focus on our five strategic initiatives enabled us to gain global value share in the first quarter and deliver positive top-line growth and strong underlying margin expansion. Our operating results are driven by our commitment to sustainable growth, and we are confident that we have the right strategies in place to achieve our full-year outlook and drive long-term value for our system and shareowners.”

Fluctuations in foreign currency exchange rates resulted in a 10 point headwind on comparable operating income and a 12 point headwind on both comparable income before taxes and EPS in the quarter.

2016 OUTLOOK

• The Company continues to expect organic revenue to be up 4% to 5% in 2016, in line with our long-term target. The net impact of acquisitions, divestitures and structural items on comparable net revenues is expected to be a 4 to 5 point headwind and based on the current spot rates, currency is expected to be a 2 to 3 point headwind, including the impact of hedged positions for the full year.
• The Company expects comparable currency neutral income before taxes (structurally adjusted) to grow 6% to 8% in 2016, in line with our long-term target, as strong operating profit growth is expected to be partially offset by increased interest expense. The net impact of structural items is expected to be a 3 to 4 point headwind and based on the current spot rates, currency is expected to be an 8 to 9 point headwind, including the impact of hedged positions for the full year.
• Given the above, the Company expects full-year comparable currency neutral EPS growth to be 4% to 6% including the impact of 3 to 4 points of structural headwind, primarily due to refranchising, on comparable currency neutral income before taxes. Based on the current spot rates, currency is expected to be an 8 to 9 point headwind, including the impact of hedged positions for the full year.
• In addition to the above, the Company expects the following:
  • The underlying effective annual tax rate in 2016 is expected to be 22.5%.
  • We are targeting full-year 2016 net share repurchases of $2.0 to $2.5 billion.
• For the second quarter of 2016, we estimate that based on the current spot rates, currency will be a 2 to 3 point headwind on comparable net revenues and an 11 point headwind on comparable income before taxes, including the impact of hedged positions.

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