Coca-Cola Earnings: Streak of Four Straight Quarters of Shrinking Margins Broken, but Profit Drops

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

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The Coca-Cola Company Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for the soft drink company fell to $1.65 billion (72 cents per share) vs. $5.77 billion ($2.46 per share) a year earlier. This is a decline of 71.3% from the year earlier quarter.

Revenue: Rose 5.2% to $11.04 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: The Coca-Cola Company reported adjusted net income of 79 cents per share. By that measure, the company beat the mean estimate of 77 cents per share. Analysts were expecting revenue of $10.99 billion.

Quoting Management: Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company, said, “Today, I am pleased to share that The Coca-Cola Company continues its momentum toward realizing our 2020 Vision, with stronger brands, clear strategies and well-focused execution to drive further growth. We once again achieved financial results for both the year and the quarter in line with, or ahead of, our long-term targets, with quarterly volume and revenue growth in every one of our five geographic operating groups. Importantly, we also continued to increase our global volume and value share in 2011.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the third quarter, net income rose 8.1% from the year earlier, while the figure increased 18.1% in the second quarter, 17.7% in the first quarter and more than threefold in the fourth quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 45.4% to $12.25 billion in the third quarter. The figure rose 46.8% in the second quarter from the year earlier and climbed 39.8% in the first quarter from the year-ago quarter.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 2 cents in the third quarter and by one cent in the second quarter.

Margins rose in the third quarter after falling the quarter before. Gross margin rose 0.9 percentage point to 60.1% from the quarter earlier quarter. In the second quarter, the figure rose 5.2 percentage points to 60.2% from the year earlier quarter.

Looking Forward: The average estimate for the first quarter of the next fiscal year is steady at 91 cents a share. The average estimate for the fiscal year is now $3.82 per share, down from $3.83 sixty days ago.

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

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com