Beverage Giant, Coca Cola (KO) reported Q4 earnings this week, exceeding estimates but realized lower revenues as the business has suffered due to the coronavirus pandemic. The Company worked on its workforce restructuring and slimmed down its portfolio to deal with the crisis. The company recorded a $15 million charge related to these efforts and a $4 million benefit from discontinuing its Odwalla brand. Coke cut about 11% of global jobs, excluding its bottling investments and global ventures segments. Coke expects to spend $350 million to $550 million on severance.
The company reported a net income of $1.46 billion, or 34 cents per share, down from $2.04 billion, or 47 cents per share, a year earlier. Earnings per share of 47 cents were reported versus 42 cents expected. Revenue stood at $8.6 billion versus $8.63 billion expected.
“It is still early days in the vaccination process and we’d expect to see further improvements in our business as vaccination become more widely available over the coming months,” stated CEO James Quincey. “It’s clear that the pace and availability of vaccines will look different around the world and therefore we’ll likely see some level of asynchronous recovery depending both on vaccine distribution and other macroeconomic factors,” he added.
Other Highlights:
- Net sales declined 5% to $8.6 billion, lower than expectations of $8.63 billion.
- Organic revenue that doesn’t include the impact of acquisitions, divestitures, or foreign currency, dropped 3% in the quarter.
- All four of its beverage segments reported volume declines, and Latin America was the only geographic region to report volume growth.
- The company’s juice, dairy, and plant-based beverage segment volume dropped by 2%.
- Sparkling soft drinks volume declined by 1%. Its namesake soda reported volume growth of 1% in the period, and Coke Zero Sugar’s volume increased 3%.
- Coke’s Simply juice, and Fairlife milk performed strong.
- The volume of its water enhanced water and sports drinks dropped by 9%. But its tea and coffee business witnessed the biggest contraction in volume as demand dropped 15%, largely due to the pressure on its Costa cafes and Dogadan tea brand in Turkey.
- Coke is expecting organic revenue growth in 2021 in the high single digits and adjusted earnings growth in a range of high single digits to low double digits.
“While we’re confident we will see a recovery this year and expect to deliver 2021 earnings that are at or above 2019 levels, we’ve provided a wider range than usual to account for lingering uncertainty in the near term as well as the potential for the acceleration to be asynchronous in nature,” stated CFO John Murphy.
Dow 30 Component, The Coca-Cola Company (KO), is the largest total beverage company in the world. It offers 500 plus brands in over 200 countries and is committed to reducing sugar in its drinks and providing new and diverse drinks to people everywhere. To learn more about The Coca-Cola Company (KO) and to continue to track its progress please visit the Vista Partners Coca-Cola Company Coverage Page.
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