Coke Remains America's Favorite Drink
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I have a hard time believing anybody who says they don't like Coke.
Whether we're talking about the soft drink or the company's stock, I think Coca-Cola (NYSE: KO)is a solid choice all around. Who wouldn't have faith in a company that has a near-monopoly on the soft drink market and brings in over ten billion dollars in net revenue each quarter?
And even though the world's largest soda company faced declining income in Q4, they still reported 1 percent North American volume growth and even higher global growth, according to reports released yesterday. The 71 percent decrease in net income for Q4 is largely attributed to restructuring costs, totalling $40 million for the quarter, and rising commodity prices for the Atlanta-based company.
But even with these barriers, Coke — which showed strong growth in worldwide markets — exceeded Wall Street analysts projections by about 2 cents per share.
Just in case you don't have the time (or motivation) to read the report, here are some highlights of the Q4:
- Reported earnings per share growth of $0.79 (or $0.72, including costs)
- International volume growth of 4 percent
- 33 percent volume growth in Thailand, and 13 percent volume growth in China
- Minute Maid brands volume growth expanded by 20 percent in 2011, while energy drinks were up 19 percent for the quarter
- Coca-Cola spent $84 million in 2011 providing aid and assistance to Japan after the March earthquakes
And with the company announcing new cost-saving measures and continued worldwide expansion in the next year, I expect Coke's earnings to continue increasing, despite rising costs of raw materials and potential foreign exchange costs — and so do analysts.
Rival soft drink company Pepsi (NYSE: PEP) will announce its fourth quarter earnings on Thursday.
How do you think Pepsi's 4th quarter performance will compare? Will Pepsi's expected large-scale investments in the company ever make it competitive with Coca-Cola?
Motley Fool newsletter services recommend The Coca-Cola Company and PepsiCo. The Motley Fool owns shares of The Coca-Cola Company and PepsiCo. chelseydulaney has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
