Coca-Cola Q1 Profit Tops Estimates; Organic Revenues Up 5%

(RTTNews) - The Coca-Cola Company (KO) reported that its first-quarter comparable earnings per share from continuing operations grew 8% year-over-year to $0.47. On average, 20 analysts polled by Thomson Reuters expected the company to report profit per share of $0.46 for the quarter. Analysts' estimates typically exclude special items. Net income from continuing operations increased 12% to $1.33 billion. Earnings per share from continuing operations rose 13% to $0.31.

First-quarter operating margin, which included items impacting comparability, grew over 220 basis points. Comparable operating margin expanded 600 basis points, driven by divestitures of lower-margin bottling businesses and the company's ongoing productivity efforts, partially offset by the adoption of the new revenue recognition accounting standard.

First-quarter net revenues declined 16% to $7.63 billion, impacted by a 26% headwind from refranchising of bottling territories. Analysts expected revenue of $7.31 billion for the quarter. Organic revenues (non-GAAP) grew 5% for the quarter, driven by concentrate sales growth of 4% and price/mix growth of 1%. Total unit case volume grew 3%, with growth across all category clusters and geographic operating groups. Trademark Coca-Cola was the largest contributor.

Cash from operations for the quarter was $613 million, down 20% primarily due to the refranchising of North American bottling territories and the impact of one less day in the quarter. Free cash flow (non-GAAP) was $339 million, up 5% driven by reduced capital investment needs.

Looking forward, Coca-Cola Company said it is on track to deliver full year targets. The company continues to project: approximately 4% growth in organic revenues; and 8% to 9% growth in comparable currency neutral operating income. Comparable EPS from continuing operations is projected to grow in the range of 8% to 10% from 2017.