Coca-Cola Q4 Profit Tops Estimates, Organic Revenue Down 3%; Reinstates Guidance

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The Coca-Cola Company (KO) said its fourth-quarter comparable earnings per share grew 6% year-on-year on an organic revenue decline of 3%. The decrease in revenue was driven by a 3% decline in price/mix while concentrate sales were even. The Coca-Cola Company continued to see improvement in trends compared to prior quarters, and has issued its 2021 outlook.

Fourth quarter comparable earnings per share was $0.47 compared to $0.44, a year ago. On average, 19 analysts polled by Thomson Reuters expected the company to report profit per share of $0.42, for the quarter. Analysts' estimates typically exclude special items.

Fourth quarter net revenues declined 5% to $8.61 billion. Analysts expected revenue of $8.63 billion, for the quarter.

For full year 2021, the company expects to deliver comparable EPS percentage growth of high single digits to low double digits from 2020. The company expects to deliver organic revenue percentage growth of high single digits.

Coca-Cola noted that the U.S. Tax Court has issued an opinion in the company's 2015 litigation with the Internal Revenue Service involving transfer pricing tax adjustments. In connection with this, the company recorded a tax reserve of $438 million for the year ended Dec. 31, 2020.

Coca-Cola said, while the company disagrees with the IRS' position and intends to vigorously defend its position, it is possible that some portion or all of the adjustment sustained by the U.S. Tax Court could ultimately be upheld. The company has calculated the potential liability of approximately $12 billion that could result from the application of the IRS' proposed transfer pricing methodology to relevant foreign licensees, including taxes and interest accrued through Dec. 31, 2020.

Shares of Coca-Cola Company were up 2% in pre-market trade on Wednesday.

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