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What’s the Latest on The Coca-Cola Company?

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Price movement

The Coca-Cola Company (KO) has a market cap of $178.5 billion. It fell 0.22% to close at $41.57 per share on December 21, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.87%, 1.4%, and -0.09%, respectively, on the same day. KO is trading 0.98% above its 20-day moving average, 0.49% above its 50-day moving average, and 3.6% 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 YTD price movement of SCHB was 13.3% on December 21. The market caps of Coca-Cola’s competitors are as follows:

  • PepsiCo (PEP) — $150.6 billion
  • Dr Pepper Snapple Group (DPS) — $16.6 billion

Latest news on KO

In a press release on December 21, 2016, Coca-Cola reported that it and Anheuser-Busch InBev “have reached an agreement regarding the transition of AB InBev’s 54.5% equity stake in Coca-Cola Beverages Africa (“CCBA”) for 3.15 billion USD, after customary adjustments. CCBA includes the countries of South Africa, Namibia, Kenya, Uganda, Tanzania, Ethiopia, Mozambique, Ghana, Mayotte and Comoros.”

It added that “the companies have reached an agreement in principle for The Coca-Cola Company to acquire AB InBev’s interest in bottling operations in Zambia, Zimbabwe, Botswana, Swaziland, Lesotho, El Salvador and Honduras for an undisclosed amount. The transactions are subject to the relevant regulatory and minority approvals and are expected to close by the end of 2017.”

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Coca-Cola’s performance in 3Q16

Coca-Cola (KO) reported 3Q16 net operating revenue of $10.6 billion, a YoY (year-over-year) fall of 7.0% from its net operating revenue of $11.4 billion in 3Q15. The fall was due to the impact of foreign exchange, acquisitions, divestitures, and structural items.

The company’s gross profit margin and operating margin expanded 80 basis points and 60 basis points, respectively. The operating margin includes the impact of foreign exchange and structural changes.

Net income, earnings per share, and cash

Coca-Cola’s net income and EPS (earnings per share) fell to $1.0 million and $0.24, respectively, in 3Q16, compared with $1.4 million and $0.33 in 3Q15. It reported non-GAAP[1. generally accepted accounting principles] EPS of $0.49 in fiscal 3Q16—a YoY fall of 3.9%. KO’s total cash, cash equivalents, and short-term investments rose 43.6% YoY, and its inventories fell 3.4% between 4Q15 and 3Q16.

Projections

Coca-Cola (KO) made the following projections for fiscal 2016:

  • organic revenue to grow 3.0%
  • comparable currency-neutral income before tax to rise 6.0%–8.0%
  • comparable EPS to fall 4.0%–7.0%

In the next and final part of this series, we’ll look at Tenneco (TEN).

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