Coca Cola (KO) Tops Q3 EPS by 7c, Updates Guidance

Coca Cola (NYSE: KO) reported Q3 EPS of $0.65, $0.07 better than the analyst estimate of $0.58. Revenue for the quarter came in at $10 billion versus the consensus estimate of $9.78 billion.

Full Year 2021

• The company expects to deliver organic revenue (non-GAAP) growth of 13% to 14%. – Updated
• For comparable net revenues (non-GAAP), the company expects a 1% to 2% currency tailwind based on the current rates and including the impact of hedged positions. – Unchanged
• The company’s underlying effective tax rate (non-GAAP) is estimated to be 18.6%. This does not include the impact of the ongoing tax litigation with the U.S. Internal Revenue Service, if the company were not to prevail. – Updated
• Given the above considerations, the company expects to deliver comparable EPS (non-GAAP) growth of 15% to 17% versus $1.95 in 2020. – Updated
• Comparable EPS (non-GAAP) percentage growth includes a 2% to 3% currency tailwind based on the current rates and including the impact of hedged positions. – Unchanged
• The company expects to generate free cash flow (non-GAAP) of approximately $10.5 billion through cash flow from operations of approximately $12.0 billion less capital expenditures of approximately $1.5 billion. This does not include any potential payments related to the ongoing tax litigation with the U.S. Internal Revenue Service. – Updated

Fourth Quarter 2021 Considerations – New

• Comparable net revenues (non-GAAP) are expected to include an approximate even currency impact based on the current rates and including the impact of hedged positions.
• Comparable EPS (non-GAAP) is expected to include an approximate 2% currency tailwind based on the current rates and including the impact of hedged positions.
• The fourth quarter has six fewer days compared to fourth quarter 2020.

Full Year 2022 – New

• The company is providing the following considerations for 2022:
• The company is confident in the underlying momentum in the business, supported by our transformation work, innovation agenda, and a more efficient and effective approach to marketing.
• The company expects elevated commodity inflation, and comparable cost of goods sold (non-GAAP) is expected to include a mid single-digit percentage commodity headwind based on the current rates and including the impact of hedged positions.
• Additionally, the company will continue to invest in the marketplace to support ongoing growth in organic revenues (non-GAAP).
• The company is providing the initial currency outlook for full year 2022 as follows:
• Comparable net revenues (non-GAAP) are expected to include an approximate 2% to 3% currency headwind based on the current rates and including the impact of hedged positions.
• Comparable EPS (non-GAAP) is expected to include an approximate 2% to 3% currency headwind based on the current rates and including the impact of hedged positions.
• The company will provide full year 2022 guidance when it reports fourth quarter earnings.
• For earnings history and earnings-related data on Coca Cola (KO) click here.

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