10-QPeriod: Q3 FY2012

COCA COLA CO Quarterly Report for Q3 Ended Sep 28, 2012

Filed October 25, 2012For Securities:KO

Summary

The Coca-Cola Company's Q3 2012 10-Q filing reveals a solid performance with growth in net operating revenues and net income, driven by increased unit case volume and strategic acquisitions. Net operating revenues increased by 1% to $12,340 million for the quarter and 3% to $36,562 million for the nine months ended September 28, 2012, compared to the prior year periods. Consolidated net income attributable to shareowners rose to $2,311 million for the quarter and $7,153 million for the nine months. The company also demonstrated strong cash flow generation from operations, totaling $7,840 million for the nine-month period, indicating robust business health and operational efficiency. Key strategic investments were made, including a significant stake in Aujan Industries, and the company continued its share repurchase program, reflecting a commitment to returning value to shareholders. Despite a stronger U.S. dollar impacting international revenues, the company managed well through strategic pricing, product mix adjustments, and operational efficiencies. Several restructuring and productivity initiatives are underway, aimed at optimizing costs and reinvesting in brand building to ensure long-term profitable growth. The company's balance sheet remains strong, with significant cash and short-term investments, providing ample liquidity for ongoing operations and strategic investments.

Financial Highlights

55 data points
Beta

Revenue

$12.34B

60.7% Gross Margin

Net Income

$2.31B

18.7% Net Margin

EPS (Diluted)

$0.50

Total Assets

$86.65B

Cash & Equivalents

$9.62B

Free Cash Flow

$3.00B

Financial Statements
Beta
Revenue$12.34B
Cost of Revenue$4.85B
Gross Profit$7.49B
SG&A Expenses$4.63B
Operating Income$2.79B
Interest Expense$102.00M
Net Income$2.31B
EPS (Basic)$0.51
EPS (Diluted)$0.50
Shares Outstanding (Basic)4.50B
Shares Outstanding (Diluted)4.59B

Key Highlights

  • 1Net operating revenues increased by 1% to $12,340 million for the third quarter and 3% to $36,562 million for the first nine months of 2012.
  • 2Consolidated net income attributable to shareowners increased to $2,311 million for the third quarter and $7,153 million for the first nine months.
  • 3Net cash provided by operating activities was strong at $7,840 million for the nine months ended September 28, 2012.
  • 4The company made significant investments, including a 50% stake in Aujan Industries' brand rights and 49% of its bottling operations for $980 million.
  • 5Strategic debt management included issuing $2,750 million in long-term debt and retiring $1,250 million of notes upon maturity.
  • 6The company effected a two-for-one stock split of its common stock on July 27, 2012, doubling authorized shares and impacting per-share data.
  • 7Productivity and reinvestment programs are progressing, targeting annualized savings and reinvestment in brand building.

Frequently Asked Questions

For the third quarter of 2012, Coca-Cola reported net operating revenues of $12,340 million, a 1% increase compared to the same period in 2011. Consolidated net income attributable to shareowners was $2,311 million, up from $2,224 million in the prior year's quarter. Diluted earnings per share were $0.50.

The company made strategic investments, notably acquiring stakes in Aujan Industries and bottling operations in Vietnam, Cambodia, and Guatemala. For the nine months ended September 28, 2012, acquisition and investment activities totaled $1,166 million. These investments are expected to contribute to future growth and market expansion.

The company noted that a stronger U.S. dollar negatively impacted its consolidated operating income. For the three and nine months ended September 28, 2012, foreign currency fluctuations decreased consolidated operating income by 8% and 6%, respectively. The company expects this trend to continue, forecasting a mid-single-digit negative impact on consolidated operating income for the fourth quarter and full year.

Yes, Coca-Cola is engaged in a four-year productivity and reinvestment program launched in February 2012. This program aims to achieve annualized savings of $550 million to $650 million through initiatives like global supply chain optimization and operating expense leverage. These savings are intended to strengthen brands and support long-term profitable growth.