Coca-Cola Q3 Profit Matches Estimates, Organic Revenues Up 5%; Updates Guidance

coca cola 042517 18oct19

The Coca-Cola Company (KO) reported that its third-quarter comparable earnings per share declined 2 percent year-on-year to $0.56. Comparable EPS performance included the impact from a 6-point currency headwind. On average, 20 analysts polled by Thomson Reuters expected the company to report profit per share of $0.56, for the quarter. Analysts' estimates typically exclude special items.

For the third-quarter, net income attributable to shareowners rose 38 percent to $2.59 billion. Earnings per share was $0.60 compared to $0.44. Operating income declined 4 percent for the quarter. Operating margin was 26.3 percent compared to 29.8 percent, prior year. Comparable currency neutral operating income grew 5 percent, for the quarter. Comparable operating margin was 28.1 percent versus 30.7 percent, a year ago. Margins were unfavorably impacted by a 260 basis point headwind from currency and net acquisitions.

Third-quarter net revenues grew 8 percent to $9.51 billion. Organic revenues were up 5 percent. Revenue growth was driven by price/mix growth of 6 percent, partially offset by a 2 percent decline in concentrate sales. Analysts expected revenue of $9.43 billion for the quarter.

Year-to-date cash from operations was $7.8 billion, up 37 percent largely due to strong underlying growth, working capital initiatives and the timing of tax payments. Year-to-date free cash flow was $6.6 billion, up 41 percent.

For fiscal 2019, the company now projects: comparable net revenues to rise in a range of 4 percent to 5 percent; and comparable operating income to increase in a range of 8 percent to 9 percent. In July, the company projected comparable net revenues growth of 4 percent, and comparable operating income increase of 7 percent to 8 percent. Earnings per share outlook is unchanged.

For fourth-quarter, Coca-Cola projects: comparable net revenues to rise 12 percent; and comparable operating income to increase 7 percent.

For fiscal 2020, the company anticipates: comparable net revenues to rise in a range of 1 percent to 2 percent; and comparable operating income to increase in a range of 2 percent to 3 percent.

Shares of Coca-Cola Company were up more than 1% in pre-market trade on Friday.

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