=Coca-Cola (KO) reported earnings on Fri 18 Oct 2019 (b/o)

 Coca-Cola reports EPS in-line, revs in-line; reaffirms FY19 EPS guidance, slightly improves revenue outlook; offers FY20 guidance

Reports Q3 (Sep) earnings of $0.56 per share, in-line with the S&P Capital IQ Consensus of $0.56; revenues rose 8.3% year/year to $9.51 bln vs the $9.42 bln S&P Capital IQ Consensus. Organic revenues (non-GAAP) grew 5%. Revenue growth was driven by price/mix growth of 6%, partially offset by a 2% decline in concentrate sales.

Operating margin, which included items impacting comparability, was 26.3% versus 29.8% in the prior year. Comparable operating margin (non-GAAP) was 28.1% versus 30.7% in the prior year. Margins were unfavorably impacted by a 260 basis point headwind from currency and net acquisitions.

Price/mix grew 6% for the quarter through revenue growth management initiatives and a benefit from geographic mix. Concentrate sales were 4 points behind unit case volume growth due to the timing of shipments during the quarter, in addition to cycling the timing of shipments in Brazil in the prior year.

Unit case volume grew 2%, primarily driven by strong growth in developing and emerging markets in addition to solid growth in North America.

FY19 Outlook:

• Co continues to see EPS of ~$2.08 (-1% to +1%), excluding non-recurring items, vs. $2.11 S&P Capital IQ Consensus; Now sees at least 5% growth in organic revenues (non-GAAP) (Previously saw 5%)

Q4 Outlook:

• Comparable net revenues (non-GAAP): 12% tailwind from acquisitions, divestitures and structural items; 3% currency headwind based on the current rates and including the impact of hedged positions
• Comparable operating income (non-GAAP): 7% currency headwind based on the current rates and including the impact of hedged positions

FY20 Outlook:

• Comparable net revenues (non-GAAP): 1% to 2% currency headwind based on the current rates and including the impact of hedged positions
• Comparable operating income (non-GAAP): 2% to 3% currency headwind based on the current rates and including the impact of hedged positions