Coca Cola (KO) Tops Q2 EPS by 1c

Coca Cola (NYSE: KO) reported Q2 EPS of $0.61, $0.01 better than the analyst estimate of $0.60. Revenue for the quarter came in at $8.9 billion versus the consensus estimate of $8.54 billion.

Outlook

The 2018 outlook information provided below includes forward-looking non-GAAP financial measures, which management uses in measuring performance. The company is not able to reconcile full year 2018 projected organic revenues (non-GAAP) to full year 2018 projected reported net revenues, full year 2018 projected comparable currency neutral operating income (adjusted for structural items and accounting changes) (non-GAAP) to full year 2018 projected reported operating income, or full year 2018 projected comparable EPS from continuing operations (non-GAAP) to full year 2018 projected reported EPS from continuing operations without unreasonable efforts because it is not possible to predict with a reasonable degree of certainty the actual impact of changes in foreign currency exchange rates; the exact timing and amount of acquisitions, divestitures and/or structural changes; the exact timing and amount of comparability items throughout 2018; and the actual impact of accounting changes. The unavailable information could have a significant impact on full year 2018 GAAP financial results.

Full Year 2018 Underlying Performance:

At least 4% growth in organic revenues (non-GAAP) – Updated
At least 9% growth in comparable currency neutral operating income (adjusted for structural items and accounting changes) (non-GAAP) – Updated

Full Year 2018 Currency Impact:

Comparable net revenues (non-GAAP): 1% headwind based on the current rates and including the impact of hedged positions – Updated
Comparable operating income (non-GAAP): 4% headwind based on the current rates and including the impact of hedged positions – Updated

Full Year 2018 Impact from Acquisitions, Divestitures, Structural Items and Accounting Changes:

Comparable net revenues (non-GAAP): 17% headwind from acquisitions, divestitures and structural items – No Change
Comparable net revenues (non-GAAP): 1% to 2% tailwind from accounting changes – No Change
Comparable operating income (non-GAAP): 2% structural headwind – No Change
Comparable operating income (non-GAAP): 0% impact from accounting changes – No Change

Full Year 2018 Other Items:

Underlying effective tax rate (non-GAAP): Estimated to be 21% – No Change
Cash from operations of approximately $8.0 billion – Updated
Capital expenditures (excluding discontinued operations): Approximately $1.7 billion – Updated
Net share repurchases (non-GAAP): Approximately $1.0 billion – No Change

Full Year 2018 EPS:

Comparable EPS from continuing operations (non-GAAP): 8% to 10% growth versus $1.91 in 2017 – No Change

Third Quarter 2018 Considerations – New:

Comparable net revenues (non-GAAP): 13% headwind from acquisitions, divestitures and structural items; 3% currency headwind based on the current rates and including the impact of hedged positions; 2% to 3% tailwind from accounting changes.
Comparable operating income (non-GAAP): 2% structural headwind; 7% currency headwind based on the current rates and including the impact of hedged positions; 2% tailwind from accounting changes.

For earnings history and earnings-related data on Coca Cola (KO) click here.

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