Coca-Cola Third Quarter Earnings Up 14%
Third quarter EPS of $0.81, an increase of 14 percent; and $0.83 on a comparable basis, an increase of 17 percent. Third quarter net revenue growth of 9 percent; and 11 percent excluding impact from the disposal of certain bottlers.
16/10/08 The Coca-Cola Company reported third quarter earnings per share of $0.81, an increase of 14 percent versus the prior year quarter on a reported basis. After considering items impacting comparability, earnings per share in the quarter were $0.83, an increase of 17 percent. Earnings per share for the quarter included a net charge of $0.02 per share for restructuring charges and costs related to global productivity initiatives partially offset by a gain on the sale of a portion of the Company’s investment in the Pakistan bottler. Earnings per share for the third quarter of 2007 were $0.71 and included a charge of $0.03 per share, primarily related to restructuring charges, which was offset by a $0.03 per share gain primarily related to the sale of a portion of the Company’s investment in Coca-Cola Amatil Limited.
“We once again demonstrated our ability to perform consistently, delivering our eighth consecutive quarter of double-digit comparable earnings growth, despite an incredibly challenging economic environment,” said Muhtar Kent, president and chief executive officer, The Coca-Cola Company. “We are managing our business for the future with continued investment behind our brands and an increased focus on effectiveness and efficiency. These efforts support long-term growth while providing additional flexibility to enable sustainable results. Importantly, our strategies are working as we diligently work alongside our bottling partners to continue to deliver global volume and value share gains.
“Our system’s ability to adapt to changing economic and consumer environments was key to our success during the quarter, and we believe that this adaptability will continue to be crucial to the business going forward. Our International operations, in particular the emerging markets, continue to drive our growth, more than offsetting the challenges that we are addressing in North America. We anticipate that the operating environment, especially in North America, will continue to be challenging as we finish 2008 and move into 2009. However, we have been diligent in taking the evolving landscape into account as we are planning for 2009, and believe that the solid fundamentals of our business, our strong balance sheet and cash generating capability, the experience of our management team and the strength of our brands will drive the business through these difficult economic times. With our continued focus on superior execution and driving productivity, I remain confident that the Coca-Cola system is well positioned for the future.”
Financial Highlights
* Third quarter net operating revenues increased 9 percent. Revenue growth reflected a 3 percent increase in concentrate sales, a 2 percent benefit from pricing and mix and a 6 percent positive currency impact, partially offset by a 2 percent decrease from structural changes primarily resulting from the sale of certain bottlers.
* Operating income in the quarter increased 20 percent on a reported basis and 17 percent after considering items impacting comparability. Items impacting comparability negatively affected third quarter pre-tax operating income by $47 million in 2008 and by $84 million in 2007. Currency benefited operating income in the quarter by 9 percent.
* The Company is on track for delivering $400 to $500 million in annualized savings from productivity initiatives by year-end 2011 to provide additional flexibility to invest for growth.
Operational Highlights
(All references to unit case volume percentage changes in this section are computed based on average daily sales. Group operational highlights are reported in line with the Company’s operating structure as described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 8, 2008.).
Total Company
* Unit case volume increased 5 percent in the third quarter and 4 percent year-to-date, successfully cycling 6 percent growth in the prior year quarter and year-to-date periods. Acquisitions contributed 1 point of unit case volume growth for the quarter.
* International operations delivered 7 percent unit case volume growth in the quarter, successfully cycling 8 percent growth in the prior year quarter. Emerging markets continued to drive the results with China, Turkey, India, Southern Eurasia, Pakistan, Nigeria and Korea delivering double-digit unit case volume growth and Brazil, Eastern Europe, North and West Africa and the Middle East delivering high single-digit unit case volume growth. Europe achieved solid unit case volume growth of 3 percent in the quarter and unit case volume in Japan increased 1 percent. North America unit case volume declined 2 percent in the quarter.
* The Company continued to achieve solid growth in sparkling beverages, which increased unit case volume 3 percent in the quarter. Key brands drove the results with Trademarks Coca-Cola, Fanta and Sprite increasing unit case volume 2, 5 and 7 percent, respectively, in the quarter.
* Still beverage unit case volume increased 10 percent in the quarter, led by strong growth across the Company’s still brand portfolio, including juice and juice drink, tea, coffee, active lifestyle and water brands.
* Globally, the Company gained volume and value share in nonalcoholic ready-to-drink beverages as well as in core sparkling and still beverage categories.
