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Coca-Cola Announces the Resignation of Evan G. Greenberg

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Price movement

Coca-Cola Company (KO) has a market cap of $181.5 billion. It fell 1.6% to close at $42.05 per share on September 26. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.12%, -2.9%, and 0.21%, respectively, on the same day. KO is trading 1.6% below its 20-day moving average, 3.1% below its 50-day moving average, and 3.3% below its 200-day moving average.

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Related ETF and peers

The Schwab US Broad Market ETF (SCHB) invests 0.75% of its holdings in Coca-Cola. The ETF tracks a cap-weighted index that measures the largest 2,500 stocks in the United States. The YTD price movement of SCHB was 6.6% on September 26.

The iShares Dow Jones Select Dividend ETF (DVY) invests 0.75% of its holdings in Coca-Cola. The ETF tracks a dividend-weighted index of the US companies. The index selects roughly 100 stocks based on dividend yield from a broad market-cap universe.

The market caps of Coca-Cola’s competitors are as follows:

  • PepsiCo (PEP) — $154.0 billion
  • Dr Pepper Snapple Group (DPS) — $16.7 billion

Latest news on Coca-Cola

Evan G. Greenberg is resigning from Coca-Cola Company’s board of directors, effective October 1, 2016.

The company reported, “Greenberg said his decision was based on increased demands on his time resulting from an acquisition by his company earlier this year to create Chubb Limited, of which he is now the Chairman and Chief Executive Officer.”

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Performance in fiscal 2Q16

Coca-Cola reported net operating revenues of $11.5 billion, a fall of 5.7% from $12.2 billion in fiscal 2Q15. Net operating revenues from the Eurasia and Africa, Europe, Latin America, Asia-Pacific, and Bottling Investments segments fell 5.6%, 1.7%, 3.7%, 2.6%, and 12.1%, respectively.

Net operating revenues from North America rose 2.2% between fiscal 2Q15 and fiscal 2Q16. The company’s gross profit margin and operating income rose 1.8% and 16.0%, respectively. Its net income and EPS (earnings per share) rose to $3.4 billion and $0.79, respectively, in fiscal 2Q16 compared to $3.1 billion and $0.71 in fiscal 2Q15.

Coca-Cola’s total cash, cash equivalents, and short-term investments and inventories rose 37.2% and 3.4%, respectively, between fiscal 4Q15 and fiscal 2Q16. Its current ratio and long-term debt-to-equity ratio fell to 1.21x and 1.09x, respectively, in fiscal 2Q16 compared to 1.24x and 1.10x, respectively, in fiscal 4Q15.

Projections

Coca-Cola made the following projections for fiscal 2016:

  • organic revenue growth of 3%
  • comparable currency-neutral income before tax growth of 6%–8%
  • comparable EPS fall of 4%–7%
  • effective tax rate of 22.5%
  • share repurchases of $2.0 billion–$2.5 billion

In the next part of this series, we’ll take a look at GoPro (GPRO).

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