ValuentumAd

Official PayPal Seal

Coke Reports Strong Second-Quarter Results

publication date: Jul 23, 2011
 | 
author/source: Valuentum Analysts
Coca-Cola (KO) reported second-quarter results Tuesday that showed strong worldwide volume growth of 6% led by expansion outside of the US, namely Eurasia and Africa (up 7%), the Pacific, which includes China (up 7%), and Latin America (up 6%). Demand for the firm’s brand Coca-Cola was particularly impressive in China (up 24%) and Russia (up 17%). Total revenue increased 47% (due primarily to its acquisition of Coca Cola Enterprises’ North American operations), though concentrate sales and currency contributed 6 percentage points of growth, respectively. During the period, Coke Zero delivered double-digit volume growth in North America, while Fanta showed high-single-digit expansion. POWERADE delivered 9% growth and gained share in the sports drink category, while the firm’s NOS Energy brand was up a solid 13%. Such solid volume growth translated into bottom-line expansion of 10% (on a comparable basis). We expect incremental price increases, additional synergies related to its bottler acquisition and ongoing company-wide productivity initiatives to help deflect rising commodity costs in future periods, aiding bottom-line growth. Management expects that commodities will have an unfavorable impact of about $700 million on the firm’s full year results. In all, we were quite satisfied with Coke’s performance during its second-quarter and look for the company to deliver on its long-term growth targets, with China and Mexico being key drivers. We’ll look to pick up shares of Coke under $50 per share.

-------------------------------------------------
The High Yield Dividend Newsletter, Best Ideas Newsletter, Dividend Growth Newsletter, Valuentum Exclusive publication, ESG Newsletter, and any reports, data and content found on this website are for information purposes only and should not be considered a solicitation to buy or sell any security. Valuentum is not responsible for any errors or omissions or for results obtained from the use of its newsletters, reports, commentary, data or publications and accepts no liability for how readers may choose to utilize the content. Valuentum is not a money manager, is not a registered investment advisor, and does not offer brokerage or investment banking services. The sources of the data used on this website and reports are believed by Valuentum to be reliable, but the data’s accuracy, completeness or interpretation cannot be guaranteed. Valuentum, its employees, and independent contractors may have long, short or derivative positions in the securities mentioned on this website. The High Yield Dividend Newsletter portfolio, ESG Newsletter portfolio, Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Performance, including that in the Valuentum Exclusive publication and additional options commentary feature, is hypothetical and does not represent actual trading. Actual results may differ from simulated information, results, or performance being presented. For more information about Valuentum and the products and services it offers, please contact us at info@valuentum.com.