Coca-Cola Bubbles Over: Fool by Numbers

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On July 18, Coca-Cola (NYSE: KO) released Q2 2006 earnings for the period ended June 30.

• Revenues slightly beat estimates, and EPS were $0.02 above expectations.
• A cost-of-goods-sold decline on a year-over-year basis, combined with a revenue increase, drove margin improvements.
• Latin America, East and South Asia, and the Pacific Rim were the best-performing regions.

(Figures in millions, except per-share data)

Income Statement Highlights

	Avg. Est.	Q2 2006	Q2 2005	Change
Sales	$6,440	$6,476	$6,310	2.6%
Net Profit	--	$1,836	$1,723	6.6%
EPS	$0.72	$0.78	$0.72	8.3%
Diluted Shares	--	2,352	2,401	(2.0%)

Get back to basics with a look at the income statement.

Margin Checkup

	Q2 2006	Q2 2005	Change*
Gross Margin	67.42%	65.99%	1.43
Operating Margin	31.49%	31.25%	0.24
Net Margin	28.35%	27.31%	1.04

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q2 2006	Q2 2005	Change
Cash + ST Invest.	$4,130	$5,011	(17.6%)
Accounts Rec.	$2,593	$2,349	10.4%
Inventory	$1,624	$1,476	10.0%

Liabilities	Q2 2006	Q2 2005	Change
Accounts Payable	$5,317	$4,288	24.0%
Long-Term Debt	$1,140	$1,110	2.7%

Learn the ways of the balance sheet.

Cash Flow Highlights

	Q2 2006	Q2 2005	Change
Cash From Ops.	$2,762	$3,534	(21.8%)
Capital Expenditures	$626	$376	66.5%
Free Cash Flow	$2,136	$3,158	(32.4%)

Find out why Fools always follow the money.

Related Companies:

• Pepsico (NYSE: PEP)
• Cott (NYSE: COT)
• Cadbury Schweppes (NYSE: CSG)
• Coca-Cola Enterprises (NYSE: CCE)
• Coca-Cola FEMSA SA (NYSE: KOF)

Related Foolishness:

• Dueling Fools: Coca-Cola
• To Catch a Thief
• Coke Is an Idiot

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Coca-Cola is a Motley Fool Inside Value selection. Pop the cap on more bubbly value opportunities with a free 30-day guest pass.

At the time of publication, Nathan Parmelee had no position in any company mentioned. Fool rules are here.