What You Need to Know About The Coca-Cola Company's Recent Earnings

Three things you need to know about Coke's latest results.

Jul 22, 2014 at 4:35PM

Coca-Cola (NYSE:KO) reported earnings before the opening bell on Tuesday. Here's what you need to know about the company's results.


Quarterly recap
The cola giant delivered earnings of $0.64 per share for the quarter, which was slightly above Wall Street's expected profits of $0.63 per share and up 1% from the year-ago period. Global sales volume rose 3% for the quarter. Yet Coke's second-quarter revenues of $12.57 billion were down 1% from the year-ago quarter. Coke attributed part of the decline to currency headwinds. Coke shares traded down more than 3% Tuesday morning after the company issued its results. 

Wins and woes
Second-quarter global unit case volume was flat in North America, despite increased marketing around the World Cup and the launch of the "Share a Coke" campaign. Yet several developing and emerging markets experienced solid volume growth in Q2. For example, China experienced 9% volume growth for the quarter, while the Middle East, South Africa, and Pakistan enjoyed double-digit volume growth. Coke's noncarbonated beverages continued to see a boost during the second quarter. The company's worldwide noncarbonated beverage volume grew by 5%, and its sparkling beverage volume grew 2% for the quarter. 


Despite Coke's Q2 sparkling beverage volume growth, domestic carbonated soft drink sales have experienced a decade-long decline. Coca-Cola is exploring one creative alternative to jolt sales. In February, Coke and Keurig Green Mountain signed a decade-long agreement to roll out Coke's portfolio of products for use in Green Mountain's upcoming Keurig Cold at-home beverage system. While Coke views the partnership as an opportunity to grow overall sales, it remains to be seen whether this alliance will boost at-home consumption of Coke products.

Looking ahead
Coke anticipates adjusted EPS will be hurt by $0.02 in the latter half of 2014 due to the restructuring of its Russian juice operations and the separation of its Brazilian bottling operations last year. During the first half of 2014, the maker of Sprite, Dasani, PowerAde, and Odwalla generated $4.5 billion in cash from operations. Coca-Cola returned $1.3 billion to shareholders in the form of share repurchases and affirmed that it's on track to achieve close to $3 billion in share repurchases by the end of 2014. Its stock currently pays a dividend yield of 2.9%. 

Foolish takeaway
As the most recent quarter's results show, Coca-Cola is struggling. Its lack of growth and stalled-out soft drink markets remain concerning for investors. Yet Coke still boasts plenty of attractive long-term growth opportunities, namely its Keurig Green Mountain partnership. For the patient investor, Coke still holds a great deal of promise.

Warren Buffett: This new technology is a "real threat"
At the recent Berkshire Hathaway annual meeting, longtime Cola-Cola investor Warren Buffett admitted this emerging technology is threatening his biggest cash-cow. While Buffett shakes in his billionaire-boots, only a few investors are embracing this new market which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping onto one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

Nicole Seghetti has no position in any stocks mentioned. Follow her on Twitter @NicoleSeghetti. The Motley Fool recommends Coca-Cola and Keurig Green Mountain. The Motley Fool has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers