Coca-Cola Earnings: Rising Revenue Helps Margins Expand, Profit Pops

S&P 500 (NYSE:SPY) component The Coca-Cola Company (NYSE:KO) reported its results for the third quarter. Coca-Cola is a leading manufacturer of nonalcoholic beverage concentrates and syrups.

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The Coca-Cola Company Earnings Cheat Sheet

Results: Net income for the beverages-soft rose to $2.31 billion (50 cents per share) vs. $2.22 billion (48 cents per share) in the same quarter a year earlier. This marks a rise of 4.1% from the year-earlier quarter.

Revenue: Rose 0.8% to $12.34 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: The Coca-Cola Company reported adjusted net income of 51 cents per share. By that measure, the company met the mean estimate of $0.51 per share. It fell short of the average revenue estimate of $12.4 billion.

Quoting Management: Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company said, ” We are pleased with our third quarter and year-to-date results. We continue to deliver consistent and solid performance, with our business growing worldwide volume by 4% in the quarter and 5% year-to-date. Importantly, we realized growth in the quarter across all five of our global geographic operating groups, despite continued volatility in the worldwide economy.”

Key Stats:

Revenue has risen for the last four quarters. Revenue increased 2.7% to $13.09 billion in the second quarter. The figure rose 5.9% in the first quarter from the year earlier and climbed 5.2% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company fell short of forecasts after beating estimates in the previous two quarters. In the second quarter, it topped the mark by 3 cents, and in the first quarter, it was ahead by one cent.

Last quarter, gross margins grew by 0.5 percentage point from the year-earlier quarter to 60.7%. This breaks a streak of two consecutive quarters of shrinking margins.

The increase in profit last quarter comes after net income fell in the previous quarter. In the second quarter, net income declined 0.3% to $2.79 billion.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past month, the average estimate for the fourth quarter has gone up from 87 cents per share to 88 cents. For the fiscal year, the average estimate has moved down from $4.09 a share to $4.03 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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