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Coca-Cola (KO) Stock Rises on Q4 Earnings & Revenue Beat
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The Coca-Cola Company (KO - Free Report) reported better-than-expected top and bottom-line results for fourth-quarter 2021. Results benefited from strategic transformation and the ongoing economic recovery around the world. Management noted that KO acquired the remaining 85% ownership in BODYARMOR for $5.6 billion.
Comparable earnings of 45 cents per share beat the Zacks Consensus Estimate of 40 cents but fell 5% from the year-ago period’s level. Favorable currency translations aided earnings by 2 basis points. Comparable currency-neutral earnings per share rose 17%.
Revenues of $9,464 million surpassed the Zacks Consensus Estimate of $8,922 million and improved 10% year over year. Organic revenues rose 9% from the prior-year quarter’s level. Coca-Cola’s top line benefited from an improved price/mix, partly offset by a decrease in concentrate sales.
In the reported quarter, Coca-Cola gained a global value share in total non-alcoholic ready-to-drink (NARTD) beverages. Coca-Cola benefited from underlying share gains in both at-home and away-from-home channels. KO’s value share in total NARTD beverages improved from the 2019 level.
Coca-Cola’s shares gained 1.6% in the pre-market trading session owing to better-than-expected fourth-quarter 2021 results. This currently Zacks Rank #3 (Hold) stock has gained 8.4% in the past three months compared with the industry’s growth of 3.8%.
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Volume and Pricing
In the reported quarter, concentrate sales slid 1%, while the price/mix rose 10%. Price/mix benefited from pricing actions in the marketplace coupled with a favorable channel and package mix owing to the lapping of last year’s pandemic-led disruptions. Concentrate sales were 10 points behind unit case volume due to six fewer days and an adverse impact of the timing of concentrate shipments.
Coca-Cola’s total unit case volume grew 9% in the fourth quarter. It was above the 2019 levels, backed by strength across majority of the markets, investments in marketplace, recovery in certain markets as well as the cycling of last year’s pandemic-led impacts. Growth was mainly led by improved trends in the developing and emerging markets, particularly in India, Russia and China. Growth in developed markets was driven by the United States, United Kingdom and Mexico.
Category Cluster Performance: In the reported quarter, volume benefited from growth in trademark Coca-Cola; sparkling flavors; the nutrition, juice, dairy and plant-based beverages; and hydration, sports, coffee and tea categories.
Sparkling soft drinks’ unit case volume improved 8% year over year, driven by robust gains across all geographic operating segments. Trademark Coca-Cola volumes were up 7% year over year on solid gains in Europe, the Middle East & Africa, and the Asia Pacific region. The sparkling flavors category improved 9% on growth in Europe, the Middle East & Africa and the Asia Pacific belt. All the categories witnessed an improvement from the pre-pandemic levels.
Volume for nutrition, juice, dairy and plant-based beverages was up 11%. The category primarily gained from all geographical categories.
The hydration, sports, coffee and tea category grew 12% in the fourth quarter. Coca-Cola witnessed 11% growth in hydration on growth across all geographies. Sports drinks rose 18% owing to a solid performance by BODYARMOR in the United States. Tea volume increased 10%, driven by gains in Hajime in Japan and the United States. The coffee business witnessed 17% growth on the reopening of the Costa retail outlets in the U.K.
Segmental Details
Revenues rose 19% for EMEA, 18% for Latin America, 15% for North America, 12% for the Asia Pacific, 41% for Global Ventures and 15% for Bottling Investments.
Organic revenues improved 18% in EMEA, 19% in Latin America, 14% in North America, 9% in the Asia Pacific, 34% in Global Ventures and 13% in Bottling Investments.
Margins
Adjusted comparable operating income fell 12% year over year due to higher marketing investments compared from the prior-year level. In dollar terms, comparable operating income rose 28% to $2,898 million. Adjusted comparable operating margin contracted 520 basis points to 22.1% due to higher marketing investments.
Financial Details
In 2021, Coca-Cola did not repurchase any shares with $10 billion remaining under the share buyback authorization. KO paid out $7.3 billion of dividend in 2021. Capital expenditures for 2021 came in at $1.4 million.
Management envisions 2022 adjusted free cash flow of $10.5 billion with $12 billion in cash flow from operations. Capital expenditures are likely to be $1.5 billion.
CocaCola Company The Price, Consensus and EPS Surprise
Coca-Cola issued an upbeat 2022 view. KO anticipates organic revenue growth of 7-8%. Revenues are likely to be impacted by a 2-3% currency headwind and a 3% positive impact of acquisition. Management expects a mid single-digit commodity price inflation.
Adjusted comparable currency neutral bottom line is estimated to rise 8-10% with adjusted comparable bottom-line growth of 5-6% year over year. This includes a currency headwind of 3-4%.
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales and EPS suggests growth of 63.2% and 117.4%, respectively, from the corresponding year-ago period’s reported figures.
Albertsons Companies currently flaunts a Zacks Rank of 1. ACI has a trailing four-quarter earnings surprise of 31.8%, on average.
The Zacks Consensus Estimate for Albertsons Companies’ current financial-year sales suggests growth of 1.6%, while the EPS implies a decline of roughly 9% from the respective year-ago period’s reported figures.
Medifast, one of the leading health and wellness companies, currently has a Zacks Rank #2 (Buy). MED has a trailing four-quarter earnings surprise of 17.3%, on average.
The Zacks Consensus Estimate for Medifast’s current financial-year sales and earnings suggests 63% and 49.3% growth, respectively, from the corresponding year-ago period’s reported figures.
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Coca-Cola (KO) Stock Rises on Q4 Earnings & Revenue Beat
The Coca-Cola Company (KO - Free Report) reported better-than-expected top and bottom-line results for fourth-quarter 2021. Results benefited from strategic transformation and the ongoing economic recovery around the world. Management noted that KO acquired the remaining 85% ownership in BODYARMOR for $5.6 billion.
Comparable earnings of 45 cents per share beat the Zacks Consensus Estimate of 40 cents but fell 5% from the year-ago period’s level. Favorable currency translations aided earnings by 2 basis points. Comparable currency-neutral earnings per share rose 17%.
Revenues of $9,464 million surpassed the Zacks Consensus Estimate of $8,922 million and improved 10% year over year. Organic revenues rose 9% from the prior-year quarter’s level. Coca-Cola’s top line benefited from an improved price/mix, partly offset by a decrease in concentrate sales.
In the reported quarter, Coca-Cola gained a global value share in total non-alcoholic ready-to-drink (NARTD) beverages. Coca-Cola benefited from underlying share gains in both at-home and away-from-home channels. KO’s value share in total NARTD beverages improved from the 2019 level.
Coca-Cola’s shares gained 1.6% in the pre-market trading session owing to better-than-expected fourth-quarter 2021 results. This currently Zacks Rank #3 (Hold) stock has gained 8.4% in the past three months compared with the industry’s growth of 3.8%.
Volume and Pricing
In the reported quarter, concentrate sales slid 1%, while the price/mix rose 10%. Price/mix benefited from pricing actions in the marketplace coupled with a favorable channel and package mix owing to the lapping of last year’s pandemic-led disruptions. Concentrate sales were 10 points behind unit case volume due to six fewer days and an adverse impact of the timing of concentrate shipments.
Coca-Cola’s total unit case volume grew 9% in the fourth quarter. It was above the 2019 levels, backed by strength across majority of the markets, investments in marketplace, recovery in certain markets as well as the cycling of last year’s pandemic-led impacts. Growth was mainly led by improved trends in the developing and emerging markets, particularly in India, Russia and China. Growth in developed markets was driven by the United States, United Kingdom and Mexico.
Category Cluster Performance: In the reported quarter, volume benefited from growth in trademark Coca-Cola; sparkling flavors; the nutrition, juice, dairy and plant-based beverages; and hydration, sports, coffee and tea categories.
Sparkling soft drinks’ unit case volume improved 8% year over year, driven by robust gains across all geographic operating segments. Trademark Coca-Cola volumes were up 7% year over year on solid gains in Europe, the Middle East & Africa, and the Asia Pacific region. The sparkling flavors category improved 9% on growth in Europe, the Middle East & Africa and the Asia Pacific belt. All the categories witnessed an improvement from the pre-pandemic levels.
Volume for nutrition, juice, dairy and plant-based beverages was up 11%. The category primarily gained from all geographical categories.
The hydration, sports, coffee and tea category grew 12% in the fourth quarter. Coca-Cola witnessed 11% growth in hydration on growth across all geographies. Sports drinks rose 18% owing to a solid performance by BODYARMOR in the United States. Tea volume increased 10%, driven by gains in Hajime in Japan and the United States. The coffee business witnessed 17% growth on the reopening of the Costa retail outlets in the U.K.
Segmental Details
Revenues rose 19% for EMEA, 18% for Latin America, 15% for North America, 12% for the Asia Pacific, 41% for Global Ventures and 15% for Bottling Investments.
Organic revenues improved 18% in EMEA, 19% in Latin America, 14% in North America, 9% in the Asia Pacific, 34% in Global Ventures and 13% in Bottling Investments.
Margins
Adjusted comparable operating income fell 12% year over year due to higher marketing investments compared from the prior-year level. In dollar terms, comparable operating income rose 28% to $2,898 million. Adjusted comparable operating margin contracted 520 basis points to 22.1% due to higher marketing investments.
Financial Details
In 2021, Coca-Cola did not repurchase any shares with $10 billion remaining under the share buyback authorization. KO paid out $7.3 billion of dividend in 2021. Capital expenditures for 2021 came in at $1.4 million.
Management envisions 2022 adjusted free cash flow of $10.5 billion with $12 billion in cash flow from operations. Capital expenditures are likely to be $1.5 billion.
CocaCola Company The Price, Consensus and EPS Surprise
CocaCola Company The price-consensus-eps-surprise-chart | CocaCola Company The Quote
Guidance
Coca-Cola issued an upbeat 2022 view. KO anticipates organic revenue growth of 7-8%. Revenues are likely to be impacted by a 2-3% currency headwind and a 3% positive impact of acquisition. Management expects a mid single-digit commodity price inflation.
Adjusted comparable currency neutral bottom line is estimated to rise 8-10% with adjusted comparable bottom-line growth of 5-6% year over year. This includes a currency headwind of 3-4%.
How Other Stocks Fared
Some better-ranked stocks in the Consumer Staples sector are Inter Parfums (IPAR - Free Report) , Albertsons Companies (ACI - Free Report) and Medifast (MED - Free Report) .
Inter Parfums currently sports a Zacks Rank #1(Strong Buy). IPAR has a trailing four-quarter earnings surprise of 29.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales and EPS suggests growth of 63.2% and 117.4%, respectively, from the corresponding year-ago period’s reported figures.
Albertsons Companies currently flaunts a Zacks Rank of 1. ACI has a trailing four-quarter earnings surprise of 31.8%, on average.
The Zacks Consensus Estimate for Albertsons Companies’ current financial-year sales suggests growth of 1.6%, while the EPS implies a decline of roughly 9% from the respective year-ago period’s reported figures.
Medifast, one of the leading health and wellness companies, currently has a Zacks Rank #2 (Buy). MED has a trailing four-quarter earnings surprise of 17.3%, on average.
The Zacks Consensus Estimate for Medifast’s current financial-year sales and earnings suggests 63% and 49.3% growth, respectively, from the corresponding year-ago period’s reported figures.