Coca Cola Beats Zacks Consensus - Analyst Blog

Coca Cola Company (KO) reported first quarter 2010 results with earnings of 80 cents per share, which was above the Zacks Consensus Estimate 74 cents. Earnings were up 23% year over year.

Net revenues increased 5% year over year during the quarter, due to a 6% positive impact from currency translation and 3% increase in concentrate sales, which were partially offset by a 2% impact from pricing and mix. Worldwide unit case volume increased 3% in the quarter, aided by a 5% improvement in international unit case volume and strong growth in Coca Cola, its trademark brand.

The emerging market of India grew an impressive 29%. Turkey, Eurasia and Africa also reported strong growth of 18%, 11% and 11%, respectively, during the first quarter. In addition, strong unit case volume growth was observed in other key markets including Brazil, France and the Benelux countries. However, North American volume declined 1%.

Carbonated soft drink (CSD) case volume grew 2% during the quarter, after a continued decline for more than a year. Non-carbonated beverage (NCB) volume increased 8%, led by sound growth across the portfolio, including juices and juice drinks, sports drinks, teas and water brands. In North America, NCB’s were down 2% year-over-year.

Gross profit margin expanded 236 basis points (bps) to 66.2% in the quarter versus 64.0% in the comparable prior-year period. The increase was primarily attributable to positive foreign currency fluctuations and lower commodity costs.

Cash from operations for the quarter was $1.3 billion, reflecting an increase of 52%. The company has a debt to capitalization ratio of 15%.
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