10-QPeriod: Q3 FY2008

COCA COLA CO Quarterly Report for Q3 Ended Sep 26, 2008

Filed October 23, 2008For Securities:KO

Summary

The Coca-Cola Company's Q3 2008 report shows a strong increase in net operating revenues and operating income, driven by a combination of volume growth, favorable price/mix, and a significant positive impact from foreign currency fluctuations. Despite global economic headwinds, the company demonstrated resilience, with notable volume growth in emerging markets like Eurasia & Africa and Latin America, while North America experienced a slight decline. Key financial highlights include robust growth in net income and diluted EPS compared to the prior year's quarter. The company also maintained a strong liquidity position, with a substantial cash balance and access to credit facilities. Investments in acquisitions and strategic initiatives, such as productivity programs and the potential acquisition of China Huiyuan Juice Group, indicate a forward-looking approach to growth and efficiency, even amidst broader market uncertainties.

Financial Highlights

29 data points
Beta

Revenue

$8.39B

64.0% Gross Margin

Net Income

$1.89B

22.5% Net Margin

EPS (Diluted)

$0.41

Cash & Equivalents

$7.80B

Free Cash Flow

$1.98B

Financial Statements
Beta
Revenue$8.39B
Cost of Revenue$3.02B
Gross Profit$5.37B
SG&A Expenses$3.14B
Operating Income$2.19B
Interest Expense$111.00M
Net Income$1.89B
EPS (Basic)$0.41
EPS (Diluted)$0.41
Shares Outstanding (Basic)4.62B
Shares Outstanding (Diluted)4.66B

Key Highlights

  • 1Net operating revenues increased by 9% to $8.4 billion for the third quarter, driven by concentrate sales volume growth, favorable price/product/geographic mix, and a significant positive currency impact.
  • 2Operating income grew by 20% to $2.2 billion for the quarter, with an operating margin improvement to 26.1% from 23.8% in the prior year.
  • 3Net income rose to $1.89 billion ($0.81 diluted EPS) from $1.65 billion ($0.71 diluted EPS) in the same quarter of the previous year.
  • 4Worldwide unit case volume increased by 5% in the third quarter, with strong performance in Eurasia & Africa (+9%) and Latin America (+8%), partially offset by a 2% decline in North America.
  • 5The company ended the quarter with a strong cash and cash equivalents balance of $7.8 billion, providing significant financial flexibility.
  • 6Strategic investments in acquisitions and productivity initiatives are ongoing, with a notable announced intention to acquire China Huiyuan Juice Group for approximately $2.4 billion.

Frequently Asked Questions

The Coca-Cola Company reported a 9% increase in net operating revenues to $8.4 billion and a 20% increase in operating income to $2.2 billion for the third quarter of 2008 compared to the same period in 2007. This growth was supported by volume increases, favorable pricing and product mix, and a significant positive impact from foreign currency fluctuations.

Worldwide unit case volume grew by 5% in the third quarter. Emerging markets showed robust growth, with Eurasia & Africa up 9% and Latin America up 8%. Europe saw a 3% increase, while the Pacific region grew by 7%. North America experienced a 2% decrease, reflecting the challenging economic environment.

The company maintained a strong liquidity position, ending the quarter with $7.8 billion in cash and cash equivalents. It also has access to $2.2 billion in committed, unused credit facilities. Management expressed confidence in the company's ability to meet its financial commitments.

The report highlights the company's intention to acquire China Huiyuan Juice Group for approximately $2.4 billion, subject to regulatory approvals. The divestiture of Remil to Coca-Cola FEMSA was also noted as contributing to investing activities. The company also made strategic brand and license acquisitions in Denmark and Finland.