The Coca-Cola Company
) is all set to unveil its second quarter 2012 results on July 17,
2012, before the start of trading. The Zacks Consensus Estimate for
the second quarter is $1.19 (estimated year-over-year improvement
of 1.7%) on revenues of $13.0 billion (year-over-year increase of
First Quarter Recap
The Coca-Cola Company delivered adjusted operating earnings of
89 cents per share in the first quarter of 2012, beating the Zacks
Consensus Estimate by a penny. Earnings were also above the
prior-year adjusted earnings of 86 cents per share driven by strong
revenue and volume growth which made up for margin declines.
In the quarter, net revenues increased 6% year over year to
$11.1 billion, benefiting from an increase in concentrate (syrups,
powders etc used in finished beverages) sales and positive price
mix (3%). The results were above the Zacks Consensus Estimate of
$10.8 billion. The cola giant witnessed volume growth (unit case
volume) of 5% in the reported quarter with gains in all geographic
regions as well as across all non-alcoholic ready-to-drink (NARTD)
beverages, whether sparkling (NARTD with carbonation) or still
(NARTD without carbonation).
Read our full report at
Coca-Cola Beats on Volume
Agreement of Estimate Revisions
Over the past 7 days, 2 of the 12 estimates on Coca-Cola has
been revised for the second quarter of 2012. The revisions have
been in the downward direction. Over the last 30 days 3 of the 12
estimates have gone down for the second quarter of 2012. Earnings
estimates for 2012 have however seen a balanced revision with 1
estimate each going up and down over the last 7 as well as 30 days.
There were 15 estimates available for the full year.
Most of the estimates were revised after the announcement of the
first quarter results in April this year. The company has not
announced any major news since then which explains the stalemate in
Magnitude of Estimate Revisions
Given the limited estimate revisions, the consensus estimate for
the second quarter of fiscal 2012 has remained static over the last
7 as well as 30 days at $1.19. The consensus estimate for fiscal
2012 has also remained static at $4.07 over the last 7 as well 30
Coca-Cola has surpassed earnings estimates in all the past four
quarters, recording a maximum positive surprise of 2.60% in the
final quarter of 2011. On average, the earnings surprise was a
We currently have a Neutral recommendation on The Coca-Cola
Company. The stock carries a Zacks #3 Rank (a short-term 'Hold'
We are encouraged by the company's global reach, strong brand
power, expanding presence outside the U.S. and its solid cash
position. Moreover, the company's acquisition of
) Bottling business and its productivity initiatives are expected
to result in significant cost savings. However, Coca-Cola needs to
ramp up its advertising spending to match arch competitor
) increased focus on North American beverages. Moreover, rising
costs of inputs have also hurt the company's margins.
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