The Coca Cola Company (KO) reported results for the fourth-quarter and full year 2010. Quarterly earnings came in at 72 cents a share, which were in line with the Zacks Consensus Estimate but up 9.0% year-over-year.
For the full year, adjusted earnings grew 14% year-over-year to $3.49 a share. Annual earnings were also in line with the Zacks Consensus Estimate.
Quarterly Details
During the reported quarter, Coca-Cola’s net revenues grew a robust 45% to $10.5 billion from $7.5 billion in the year-ago period. Revenues were also well above the Zacks Consensus estimate of $9.5 billion.
The growth was mainly attributable to a 6% increase in concentrate sales, 2% favorable impact of price and mix and 37% benefit from structural changes primarily related to the Coca Cola Enterprises (CCE) transaction. Global unit case volume increased 6% in the quarter.
Annual revenues grew 14% to $34.5 billion which was also above the Zacks Consensus Estimate of $34.1 billion.
Geographically, the Eurasia & Africa division witnessed volume growth of 14% year-over-year led by Russia, which surged 31%, while Turkey, Southern Eurasia and East and Central Africa posted high single-digit volume growth. The Latin American segment volumes increased 5% driven by Mexico (8%), Brazil (7%) and (6%) growth in South Latin Region. The Pacific region recorded volume growth of 1%, led by Philippines, Korea, and Japan which were partially offset by decline in China. Volume in the North American segment grew 3%.
Coca-Cola’s gross profit during the quarter declined 548 basis points to 59.2% versus 64.7% in the prior-year quarter, due to increased commodity costs. The operating profit reduced by 35% to $1.1 billion from $1.7 billion in the prior-year period.
Balance Sheet , Cash Flow and Share Repurchase
Coca-Cola exited the year with $8.5 billion in cash and cash equivalents and a long-term debt-to-capitalization of 31%. During the first half of 2010, the company generated $9.5 billion of cash from operations and deployed $4.1 billion towards dividends.
In 2011, the company intends to repurchase shares worth $2.0 to $2.5 billion as part of its share repurchase program.
During the year, the company completed its transaction with CCE as per plan with expected cost synergies of $140 to $150 million in fiscal 2011.
Coca-Cola’s Productivity initiatives are also as per schedule and the company intends to achieve $500 million in annualized savings by fiscal 2011.
COCA-COLA ENTRP (CCE): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
Zacks Investment Research
