Summary
Coca-Cola Company (KO) reported its first-quarter 2018 financial results, showing a net income of $1.4 billion, or $0.32 per diluted share, an increase from $1.18 billion, or $0.27 per diluted share, in the prior year quarter. Net operating revenues for the quarter decreased by 16% to $7.6 billion from $9.1 billion in the first quarter of 2017. This revenue decline was largely attributed to the impact of divestitures, particularly the refranchising of bottling territories, which significantly reduced reported revenue but also led to a substantial decrease in cost of goods sold and selling, general, and administrative expenses. The company's balance sheet reflects a strong liquidity position, with cash and cash equivalents increasing to $8.3 billion. Strategic investments and acquisitions, totaling $183 million in the quarter, focus on acquiring additional interests in bottlers. Management also highlighted ongoing productivity and reinvestment programs aimed at driving long-term profitable growth. Despite the reported revenue decline, the company's operational performance, including a healthy gross profit margin of 64.1%, indicates resilience and a focus on efficiency.
Financial Highlights
54 data points| Revenue | $7.63B |
| Cost of Revenue | $2.74B |
| Gross Profit | $4.89B |
| SG&A Expenses | $2.54B |
| Operating Income | $1.81B |
| Interest Expense | $230.00M |
| Net Income | $1.37B |
| EPS (Basic) | $0.32 |
| EPS (Diluted) | $0.32 |
| Shares Outstanding (Basic) | 4K |
| Shares Outstanding (Diluted) | 4K |
Key Highlights
- 1Net income increased to $1.40 billion ($0.32/share) from $1.18 billion ($0.27/share) year-over-year.
- 2Net operating revenues decreased by 16% to $7.63 billion, primarily due to divestitures and structural changes in bottling operations.
- 3Gross profit margin improved to 64.1% from 61.5% year-over-year, largely driven by the impact of divestitures.
- 4Cash and cash equivalents significantly increased to $8.29 billion from $6.01 billion at the end of the prior year.
- 5The company adopted new accounting standards (ASC 606 for revenue recognition and others) effective January 1, 2018, which impacted financial statement presentation.
- 6Operating income was negatively impacted by significant "other operating charges" totaling $536 million, largely due to asset impairments and restructuring costs.
- 7The company continues its focus on strategic acquisitions, with $183 million invested in bottler interests during the quarter.