Coca-Cola Surpasses 1st-Quarter Earnings and Revenue Projections
Coca-Cola (NYSE:KO) released its first-quarter 2020 results on April 21 before the market opened. Both earnings and revenue beat expectations as customers bought large quantities of beverages in response to the extended stay-at-home orders in many countries.
By the numbers
The Atlanta-based company posted earnings of $0.51 cents per share, which reflected a growth of 3 cents from the same period last year. Revenue of $8.6 billion dropped 1% on a year-over-year basis (the quarter had one less selling day). Analysts had predicted earnings of $0.44 per share on $8.3 billion in revenue. Organic revenue, barring the impact of foreign currency, acquisitions and divestitures, remained flat as compared to the year-ago period.
CEO James Quincey said the following on the earnings report:
"Our approach to navigating the pandemic is grounded in our company's purpose, which ensures that we continuously strive to make a difference for people in the communities we serve around the world. We've been through challenging times before as a company, and we believe we're well positioned to manage through and emerge stronger. The power of the Coca-Cola system is our greatest strength in times of crisis. The resilience of our people, the equity of our brands and the strength of our bottling partners continue to be competitive advantages in the market."
Segment performance
Barring China, total units case volume increased 3% through the end of February. The same metric dipped 1% for the quarter as soft demand in Asia-Pacific offset growth in North America.
Unit case volumes for water, enhanced water and sports drinks surged a combined 2%. By contrast, volume for sparkling soft drinks was down 2%.
Geographically, sales climbed 1% in North America and 8% in Latin America, but were down 4% in Asia-Pacific. Revenue in the Europe, Middle East and Africa segment was flat compared to the prior-year quarter. Global Ventures' revenue plunged 2%, largely driven by the Costa retail store closures in China and the United Kingdom.
Looking ahead
The Covid-19 pandemic escalated quickly in March, leading to closures of movie theatres, restaurants and stadiums. This is expected to have a "material" impact on the company's second-quarter results. In fact, the soda giant has witnessed as much as 25% volume decline globally since the beginning of April. The company says it expects to bounce back in the second half of 2020.
Guidance
The company did not issue full-year 2020 guidance figures for earnings and revenue, citing the global uncertainty caused by the pandemic.
Disclosure: I do not hold any positions in the stocks mentioned.
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This article first appeared on GuruFocus.
