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Global beverage giant Coca-Cola (KO - Free Coca-Cola Stock Report) has reported respectable results for its September quarter. Earnings came in at $0.53 a share, up 6% from the prior-year period, but a penny below our estimate. Reported revenues dropped 3%, largely due to the deconsolidation of bottling operations in the Philippines and Brazil and currency headwinds. Volume trends, though, were solid, and the company again increased its value share of the nonalcoholic ready-to-drink beverage market. Unit cases sold rose 2% year over year, a slight improvement from the June-period advance of 1%. The Pacific region led the way, as strong gains in Vietnam (+21%), China (+9%), and Thailand (+8%) helped to lift volumes 5%. Europe, on the other hand, remained a weak spot, reflecting difficult macroeconomic conditions, particularly in the southern half of the continent. Still, trends there did improve modestly sequentially, as volumes rose 1% from the prior-year period, after posting a 1% decline in the June quarter.  

Meanwhile, the company kept good control of its expenses, which allowed it to generate 8% growth in comparable, currency-neutral operating income. All five geographic regions contributed to the increase, offsetting deconsolidation-related declines in its Bottling Investments Group.

In sum, we are keeping our 2013 earnings estimate at $2.10 a share, which would represent an increase of 7% from last year's tally of $1.97. We are, however, turning slightly more cautious in our 2014 outlook, trimming $0.05 a share from our full-year estimate, which now stands at $2.25. This would represent a mid-single-digit advance, consistent with this year's estimated growth rate.

The market had a relatively muted reaction to Coke's third-quarter performance. Overall, the stock has struggled to keep pace with the broader market in the second half of 2013, and we don't see a near-term catalyst to light a fire under this equity. In view of this, we think these high-quality shares remain best suited for conservative accounts focused on risk-adjusted total returns out to 2016-2018. 

About the Company:The Coca-Cola Company is the world's leading marketer of ready-to-serve, nonalcoholic beverages. On any given day, 1.7 billion individual servings of the company's brands are consumed by people around the globe. The Atlanta-based company currently has more than 500 wholly owned and licensed brands, including 15 that generate $1 billion or more in annual sales.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.