Summary
The Coca-Cola Company's first quarter 2009 results show a slight decrease in net operating revenues to $7.17 billion from $7.38 billion in the prior year, largely due to a significant negative impact from foreign currency fluctuations as the U.S. dollar strengthened. Net income attributable to shareowners decreased to $1.35 billion from $1.50 billion, resulting in diluted EPS of $0.58 compared to $0.64 in the prior year. Despite revenue headwinds, the company demonstrated resilience with a slight increase in worldwide unit case volume and a focus on operational efficiency and cost management. The company also saw a substantial increase in cash and cash equivalents, partly in anticipation of the now-declined Huiyuan acquisition, and initiated longer-term debt to manage its capital structure. Key financial highlights include a robust operating income of $1.86 billion, driven by strong performance in international segments like Europe and Latin America, although impacted by restructuring charges and an asset impairment totaling $92 million. The company's balance sheet remains strong with total assets of $43.1 billion. Management is actively managing market risks through hedging strategies and maintaining a solid liquidity position with ample credit facilities, indicating confidence in meeting financial commitments.
Key Highlights
- 1Net operating revenues decreased by 3% to $7.17 billion, primarily impacted by a 10% unfavorable currency fluctuation effect.
- 2Consolidated net income attributable to shareowners declined to $1.35 billion ($0.58 diluted EPS) from $1.50 billion ($0.64 diluted EPS) in the prior year.
- 3Worldwide unit case volume increased by 2% (4% on average daily sales basis due to 5 extra days in Q1 2009), with growth in emerging markets like Eurasia & Africa and Latin America offsetting declines in North America and Europe.
- 4Operating income remained strong at $1.86 billion, though slightly down from $1.87 billion, with operating margin improving slightly to 26.0% from 25.4% on a consolidated basis.
- 5The company reported $92 million in other operating charges, including restructuring costs ($52 million), asset impairment ($23 million), and productivity initiatives ($17 million).
- 6Cash and cash equivalents significantly increased by $2.1 billion to $6.8 billion, partly due to funds held for the abandoned Huiyuan acquisition.
- 7The company issued $2.25 billion in long-term debt to replace short-term debt and manage its capital structure.