10-QPeriod: Q1 FY2012

COCA COLA CO Quarterly Report for Q1 Ended Mar 30, 2012

Filed April 26, 2012For Securities:KO

Summary

The Coca-Cola Company's first quarter 2012 results show continued top-line growth with net operating revenues increasing by 6% year-over-year to $11,137 million. This growth was driven by a combination of factors including volume increases across most geographic segments, strategic pricing initiatives, and a favorable product and geographic mix. Diluted earnings per share saw a healthy increase to $0.89 from $0.82 in the prior year's comparable period, reflecting the company's operational effectiveness and ability to manage costs. The company continued to invest in its business, with significant capital expenditures and strategic acquisitions, including bottling operations in Vietnam and Cambodia. Furthermore, Coca-Cola announced a new four-year productivity and reinvestment program aimed at generating annualized savings to fuel future growth and brand building. While facing some headwinds such as increased commodity costs and unfavorable foreign currency fluctuations, the company demonstrated resilience and a strong ability to manage these challenges through effective hedging strategies and operational efficiencies.

Financial Highlights

55 data points
Beta

Revenue

$11.14B

61.0% Gross Margin

Net Income

$2.05B

18.4% Net Margin

EPS (Diluted)

$0.45

Total Assets

$83.90B

Cash & Equivalents

$10.66B

Free Cash Flow

-$99.00M

Financial Statements
Beta
Revenue$11.14B
Cost of Revenue$4.35B
Gross Profit$6.79B
SG&A Expenses$4.18B
Operating Income$2.51B
Interest Expense$88.00M
Net Income$2.05B
EPS (Basic)$0.45
EPS (Diluted)$0.45
Shares Outstanding (Basic)4.53B
Shares Outstanding (Diluted)4.60B

Key Highlights

  • 1Net operating revenues increased 6% to $11,137 million, driven by volume, price, and mix.
  • 2Diluted earnings per share rose to $0.89 from $0.82 in the prior year's first quarter.
  • 3The company announced a new four-year productivity and reinvestment program targeting $550-$650 million in annualized savings.
  • 4Investments were made in acquisitions, including bottling operations in Vietnam and Cambodia.
  • 5Global unit case volume increased by 5%, with notable growth in Eurasia & Africa and Pacific segments.
  • 6The company repurchased approximately $1.1 billion of treasury stock during the quarter.
  • 7Long-term debt increased by $2.7 billion due to new debt issuances.

Frequently Asked Questions

Revenue growth was primarily driven by a 6% increase in net operating revenues, attributed to a combination of factors including a 5% increase in global unit case volume, strategic pricing initiatives, and a favorable price, product, and geographic mix across its operating segments.

The company experienced an increase in commodity costs, particularly for juices and sweeteners, which impacted gross profit margins. However, Coca-Cola implemented price increases in key markets and leveraged its hedging activities for certain commodities to mitigate some of this impact. They also expect incremental commodity costs to range between $350 million and $450 million for the full year 2012.

The company announced a new four-year productivity and reinvestment program starting in 2012, aimed at generating annualized savings of $550 million to $650 million by the end of 2015. These savings will be reinvested in brand-building initiatives and to mitigate potential incremental commodity costs.

Foreign currency fluctuations had an unfavorable impact, decreasing consolidated net operating revenues by 1% and impacting operating income negatively across several segments, primarily due to a stronger U.S. dollar against key foreign currencies. However, the company utilizes hedging strategies to mitigate these risks over time.