We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Coca-Cola to Boost Investment in Argentina to $1.2 Billion
Read MoreHide Full Article
The Coca-Cola Company (KO - Free Report) has plans to boost its investment in Argentina. The beverage giant intends to invest $1.2 billion in the country within the time period of 2019-2021, as stated by the company in a statement on May 29. Earlier, Coca-Cola had plans to invest $1 billion in the 2016-2018 time frame.
Coca-Cola was one of the companies to initiate a major investment in Argentina after Macri took charge in late 2015, promising business-friendly reforms.
Notably, the company’s performance in Latin America clearly improved in the last reported quarter, particularly in Brazil and Argentina, where modest volume growth was witnessed. In fact, improvement in the key markets like India, Argentina and Brazil was noticed in the second half of 2017 and in first-quarter 2018.
The Latin America segment registered revenues of $998 million in the first quarter of 2018, up 8% from the prior-year quarter. Price/mix growth was 6% in the quarter, primarily driven by strong price/mix in Mexico and the South Latin business unit. Organic revenues grew 6%.
Unit case volume increased 1%, as low to mid-single-digit growth in Brazil, Argentina and Mexico was offset by a decline in both Peru and Chile.
Coca-Cola has a commanding presence in the developing and emerging markets of Latin America, India, Russia and China, courtesy of the growth opportunities that these countries provide. More than half of the company’s revenues are generated outside the United States.
First-Quarter 2018 At a Glance
Coca-Cola started 2018 on a solid note, beating the Zacks Consensus Estimate on both counts in the first quarter. In addition to a notable increase in soda volumes, it also gained from its growing beverage portfolio and restructuring efforts. Organic sales grew 5%, led by price/mix improvement of 1% and concentrate sales growth of 4%. Currency also had a 2% positive impact on revenues. Again, lower SG&A expenses (down 24.2%), along with higher gross margin (up 270 basis points or bps) and operating margin (up 600 bps) helped it come up with better earnings (up 8%).
However, total sales decreased 16% year over year, marking the 12th consecutive quarterly decline in revenues. Although the top line is yet to show sustained improvement, we are encouraged by its strategic efforts to transform its portfolio into a total beverage company, with improved marketing and innovation, focus on driving revenues by improved price/mix, digital focus, and productivity initiatives toward driving margins.
Share Price Performance
Coca-Cola’s shares have lost 7% year to date, comparing favorably with the industry’s 11.3% decline. Earnings estimates for 2018 have moved 0.5% north in the past 60 days, while the same remained stable for 2019. This reflects analysts’ optimism on the stock’s earnings potential.
Making the most of the growth opportunities in the emerging countries, along with improved marketing and innovation will drive its revenues.
Changing demographics and purchasing behavior make it essential for Coca-Cola, and other food as well as beverage giants like PepsiCo (PEP - Free Report) , Monster Beverage Corporation (MNST - Free Report) and Dr Pepper Snapple Group, Inc. to understand and capitalize on the primary consumer insights that identify growing trends.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Coca-Cola to Boost Investment in Argentina to $1.2 Billion
The Coca-Cola Company (KO - Free Report) has plans to boost its investment in Argentina. The beverage giant intends to invest $1.2 billion in the country within the time period of 2019-2021, as stated by the company in a statement on May 29. Earlier, Coca-Cola had plans to invest $1 billion in the 2016-2018 time frame.
Coca-Cola was one of the companies to initiate a major investment in Argentina after Macri took charge in late 2015, promising business-friendly reforms.
Notably, the company’s performance in Latin America clearly improved in the last reported quarter, particularly in Brazil and Argentina, where modest volume growth was witnessed. In fact, improvement in the key markets like India, Argentina and Brazil was noticed in the second half of 2017 and in first-quarter 2018.
The Latin America segment registered revenues of $998 million in the first quarter of 2018, up 8% from the prior-year quarter. Price/mix growth was 6% in the quarter, primarily driven by strong price/mix in Mexico and the South Latin business unit. Organic revenues grew 6%.
Unit case volume increased 1%, as low to mid-single-digit growth in Brazil, Argentina and Mexico was offset by a decline in both Peru and Chile.
Coca-Cola has a commanding presence in the developing and emerging markets of Latin America, India, Russia and China, courtesy of the growth opportunities that these countries provide. More than half of the company’s revenues are generated outside the United States.
First-Quarter 2018 At a Glance
Coca-Cola started 2018 on a solid note, beating the Zacks Consensus Estimate on both counts in the first quarter. In addition to a notable increase in soda volumes, it also gained from its growing beverage portfolio and restructuring efforts. Organic sales grew 5%, led by price/mix improvement of 1% and concentrate sales growth of 4%. Currency also had a 2% positive impact on revenues. Again, lower SG&A expenses (down 24.2%), along with higher gross margin (up 270 basis points or bps) and operating margin (up 600 bps) helped it come up with better earnings (up 8%).
However, total sales decreased 16% year over year, marking the 12th consecutive quarterly decline in revenues. Although the top line is yet to show sustained improvement, we are encouraged by its strategic efforts to transform its portfolio into a total beverage company, with improved marketing and innovation, focus on driving revenues by improved price/mix, digital focus, and productivity initiatives toward driving margins.
Share Price Performance
Coca-Cola’s shares have lost 7% year to date, comparing favorably with the industry’s 11.3% decline. Earnings estimates for 2018 have moved 0.5% north in the past 60 days, while the same remained stable for 2019. This reflects analysts’ optimism on the stock’s earnings potential.
Making the most of the growth opportunities in the emerging countries, along with improved marketing and innovation will drive its revenues.
Changing demographics and purchasing behavior make it essential for Coca-Cola, and other food as well as beverage giants like PepsiCo (PEP - Free Report) , Monster Beverage Corporation (MNST - Free Report) and Dr Pepper Snapple Group, Inc. to understand and capitalize on the primary consumer insights that identify growing trends.
The company currently has Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>