This summary is based on the first quarter fiscal 2007 earnings call conducted by The Coca-Cola Co. (KO) on April 17, 2007.
Key Investors Issues
- EPS were 54 cents a share compared to 47 cents a share a year ago.
- Net income rose to $1.26 billion from $1.11 billion in the year-earlier period
- Revenue jumped 17% from a year ago to $6.1 billion.
First Quarter Highlights
Earnings per share were 54 cents compared to 47 cents a year ago.
This included a net charge primarily related to an asset write-off in the Philippines bottler, partially offset by gains on the sales of the equity interest in a Brazilian bottler and real estate in Spain. After considering items impacting comparability, earnings per share were 56 cents per share. Earnings per share increased 15% on a reported basis and 14% after considering items impacting comparability in both the current and prior years. Earnings per share for the first quarter of 2006 were 47 cents and included a net charge of 2 cents per share.
Net operating revenues increased 17% to $6.1 billion.
It reflected the growth in gross profit, the investments in marketing and the net benefit from items impacting comparability.
Operating income increased 17% on a reported basis and 14% after considering items impacting comparability.
Items impacting comparability negatively affected first quarter operating income by $10 million pre-tax in 2007 and by $45 million pre-tax in 2006. Currency benefited operating income in the quarter by 3%.
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Cost of goods sold increased 24%, reflecting a 6% increase in concentrate sales, an 11% increase from structural change resulting from the acquisitions of certain bottlers, a 2% increase from currency and increases in commodity-based input and freight costs.
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Selling, general and administrative expenses increased 13%, reflecting a 4% increase from structural change resulting from the acquisitions of certain bottlers, a 3% increase from currency, increased costs in the consolidated bottling operations to drive growth and continued investments in marketing.
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Equity income declined reflecting the write-off of assets at the Philippines bottler and the reduction in the company’s ownership positions in
The company repurchased $676 million of its stock.
In February, the company approved its 45th consecutive annual dividend increase, an annualized increase of 10% over 2006.
- Unit case volume increased 6% with nearly all of top 22 markets delivering solid growth.
International operations delivered 9% unit case volume growth, reflecting broad-based growth across essentially all key geographies.
Latin America continued to deliver strong growth across the region. Key emerging markets, including China, Russia, South Africa, Nigeria, Eastern Europe and Southern Eurasia all increased at double-digit rates.
- Unit case volume growth of 3% in Japan reflected continued improvement as the strategy to return to sustainable growth gained traction.
- The European Union Group delivered strong unit case volume growth of 11%.
- Double-digit unit case volume declines in the Philippines offset the benefit of prior year brand acquisitions.
The company continued to deliver strong growth in sparkling beverages, which increased unit case volume 5%.
Key brands drove the results with Trademarks Coca-Cola, Sprite and Fanta growing unit case volume 4%, 9% and 7%, respectively, for the quarter.
In still beverages, Trademarks Dasani, Powerade and Aquarius continued their strong performance.
