--> KO -2.98% pre-market
Coca-Cola reports EPS in-line, misses on revs; sees FY14 and FY15 results below long term targets (lowers top line target); expands restructuring program
Reports Q3 (Sep) earnings of $0.53 per share, excluding non-recurring items, in-line with the Capital IQ Consensus of $0.53; revenues fell 0.4% year/year to $11.98 bln vs the $12.15 bln consensus. Excluding the impact of structural changes, comparable currency neutral net revenues grew 1%, reflecting 1% concentrate sales growth and 1% positive price/mix. Concentrate sales growth and unit case volume growth were in line during the quarter; global volume growth 1%.
- Co sees 100-200 bps headwind on net rev and 200 bps headwind on operating income in Q4.
- Company is maintaining its long-term high single-digit EPS growth target, adjusting its net revenue target to mid single-digit growth, and targeting profit before tax in place of operating income to account for increased equity income growth from its new partnership model.
- Going forward, the co will have a profit before tax target of 6% to 8%.
- The Company expects to be below its long-term EPS growth target in 2014 and, based on the current outlook, does not expect comparable currency neutral EPS growth in 2015 to be significantly different from 2014. Further, the Company expects fluctuations in foreign currency exchange rates to have an unfavorable impact on its results in 2015.
- Based on current spot rates, existing hedge positions, and the cycling of 2014 rates, the Company expects a mid single-digit headwind on profit before tax in 2015.
- Streamlining and simplifying its operating model to speed decision making and enhance local market focus. Expanding its current successful productivity program by targeting annualized savings of $3 billion per year by 2019 (via restructuring, etc).
- Longer term, the Company intends to return to delivering against its stated growth targets.
- Beginning in 2015, revenue growth will be added as a metric in the Company's incentive plans. The Company will adjust the relative importance of volume and price/mix in each market in order to drive the right behavior for each market type.