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Coca-Cola Q1 Profit Declines 19%, But Results Top Estimates

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Beverages giant Coca-Cola Co. (KO) reported Tuesday a 19 percent decline in profit for the second quarter from last year as a revenue growth of 5 percent and improved margins were offset by higher income taxes and interest expense.

However, adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also maintained its adjusted earnings and organic revenue growth outlook for the full-year 2021.

Net income attributable to shareowners of Coca-Cola for the second quarter declined 19 percent to $2.25 billion or $0.52 per share from $2.78 billion or $0.64 per share in the prior-year quarter. Excluding items, comparable earnings per share were $0.55, compared to last year's $0.51.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.50 per share for the quarter. Analysts' estimates typically exclude special items.

Net operating revenues for the quarter increased 5 percent to $9.02 billion from $8.60 billion in the same quarter last year, driven by a 5 growth in concentrate sales and a 1 percent growth in price/mix. The Street expected revenue of $8.61 billion for the quarter.

Organic revenues also grew 6 percent in the quarter. Global unit case volume was even as continued strength in at-home channels was offset by coronavirus-related pressure in away-from-home channels.

Strong growth in developing and emerging markets, led by China and India, was offset by pressure in developed markets, primarily the United States and Western Europe.

Looking ahead to the second quarter, Coca-Cola projects comparable net revenues on an adjusted basis to be impacted by a 3 to 4 percent currency tailwind based on the current rates and including the impact of hedged positions. Comparable earnings are expected to include an approximate 5 to 6 percent currency tailwind.

For fiscal 2021, the company continues to expect comparable earnings to grow in a range of high single digits to low double digits percentage compared to $1.95 per share in 2020, with a 2 to 3 percent currency tailwind. It also still projects organic revenue growth in the high single digit percentage, with a 1 to 2 percent currency tailwind.

The Street is looking for earnings of $2.14 per share on revenue growth of 11.4 percent to $36.72 billion for the year.

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