Earnings Preview : Coca-Cola Company (NYSE: KO): Second Quarter 2010
By:NewsyStocks   Monday, July 19, 2021 10:41 AM

Coca-Cola Company (NYSE: KO), the world's largest beverage maker, is scheduled to release second quarter earnings before the opening bell on Wednesday, July 21, 2010. Analysts, on average, expect the company to report earnings of $1.03 per share on revenue of $8.70 billion. In the year-ago period, the company reported earnings of 92 cents per share on revenue of $8.27 billion.

The Coca-Cola Company manufactures, distributes, and markets nonalcoholic beverage concentrates and syrups worldwide. It principally offers sparkling and still beverages.

In the preceding first quarter, the Atlanta, Georgia-based company reported that its profit rose to $1.6 billion, or 69 cents a share, from $1.35 billion, or 58 cents a share, in the prior-year quarter. Adjusted net income totaled 80 cents a share. Revenue grew 5% to $7.53 billion. Analysts, on average, expected the company to report earnings of 74 cents per share on revenue of $7.72 billion. Unit case volume - the measure of all the company's drinks sold worldwide - rose 3%, including a 5% increase overseas. Unit case volume increased 11% in Eurasia and Africa in the quarter, with continued strong growth of 29% in India and 18% growth in Turkey.

Coca Cola's long-term growth targets call for annual sales volume to increase 3 percent to 4 percent, revenue to increase 5 percent to 6 percent and earnings per share to increase at a high single-digit percentage rate.

Last year, the company provided a roadmap for more than doubling its system revenue by 2020 to $200 billion, while increasing systems margins. The company expects to more than double servings to over three billion a day by 2020 and becoming No.1 in the nonalcoholic ready-to-drink business in every market and every category. By 2020, Coke expects to have about 30 brands with sales of $1 billion.

The company has been able to offset declining sales in the United States with strong growth in emerging markets like India, China and Brazil. Coca Cola expects international business and sales of non-carbonated beverages to play key roles in achieving its long-term growth targets. The company expects its margin to 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.

Since it generates more than three-quarters of its revenue from international markets, currency fluctuations can increase or reduce its earnings. The company expects overall currency translation to have a slightly positive impact on its operating income for the full year with its benefit weighted towards the first half of the year.

Among other developments, the beverages giant agreed to distribute certain brands of Dr Pepper Snapple Group, Inc. (NYSE: DPS) in a 20-year deal worth $715 million in cash. The company remains on track to close acquisition of North American operations of Coca-Cola Enterprises in the fourth quarter of this year.

Coca Cola Co. expects to repurchase at least $1.5 billion of stock by the end of 2010. Late in April, the company declared a regular quarterly dividend of 44 cents per outstanding share of the company's common stock. In terms of stock performance, Coca Cola shares have lost nearly 7 percent since the beginning of the year.

Disclosure: Author doesn't own any of the stocks discussed here.