Summary
The Coca-Cola Company's first quarter 2017 filing reveals a notable decrease in net operating revenues, primarily driven by divestitures and unfavorable foreign currency exchange rates, which offset positive price/mix impacts and lower commodity costs. While gross profit margin improved, consolidated net income attributable to shareowners decreased to $1,182 million, or $0.27 per diluted share, compared to $1,483 million, or $0.34 per diluted share, in the prior year period. The company continues its strategic refranchising of bottling territories, particularly in North America and China, which significantly impacted assets and liabilities held for sale and contributed to recognized losses on divestitures. Despite the revenue decline, the company maintained a strong liquidity position with an increase in cash and cash equivalents and a robust cash flow from operations. Significant activities during the quarter included debt issuances and repayments, share repurchases, and continued investment in productivity initiatives. The company also noted ongoing legal proceedings with the IRS regarding tax years 2007-2009, asserting confidence in its position but acknowledging the potential material impact if the IRS prevails.
Financial Highlights
55 data points| Revenue | $9.12B |
| Cost of Revenue | $3.51B |
| Gross Profit | $5.61B |
| SG&A Expenses | $3.35B |
| Operating Income | $1.96B |
| Interest Expense | $192.00M |
| Net Income | $1.18B |
| EPS (Basic) | $0.28 |
| EPS (Diluted) | $0.27 |
| Shares Outstanding (Basic) | 4K |
| Shares Outstanding (Diluted) | 4K |
Key Highlights
- 1Net operating revenues decreased by $1,164 million (approximately 11%) compared to the prior year quarter, largely due to divestitures and foreign currency headwinds.
- 2Consolidated net income attributable to shareowners declined to $1,182 million ($0.27 per diluted share) from $1,483 million ($0.34 per diluted share) in the prior year period.
- 3The company's strategic refranchising of bottling territories in North America and China continued, leading to significant increases in 'Assets held for sale' and 'Liabilities held for sale' on the balance sheet.
- 4Cash and cash equivalents increased substantially by $3,565 million, reaching $12,120 million, indicating a strong liquidity position.
- 5Operating income was negatively impacted by unfavorable foreign currency exchange rates, which reduced it by approximately 4% globally.
- 6The company incurred significant charges related to restructuring and impairment, including an $84 million goodwill impairment for CCR and $20 million for Venezuelan intangible assets.
- 7The IRS has issued a Statutory Notice of Deficiency for tax years 2007-2009, claiming a potential additional federal income tax liability of approximately $3.3 billion plus interest, which the company disputes.