Coca-Cola’s (KO) Cost Cutting Measures Work – Earnings Beat Estimates


This morning The Coca-Cola Co (NYSE:KO) reported their fourth quarter earnings, and from the looks of things Chief Executive Officer Muhtar Kent’s $3 billion cost-reduction strategy is paying dividends, quite literally.

The Coca-Cola Co (NYSE:KO) reported earnings per shares of $0.38 while analysts were looking for $0.37, and despite a slowing global economy, the company was able to do well thanks in part to lower commodity prices. The company has also reached a deal in China for their partners Swire Beverage and Cofco to take on all bottling operations within the Asian nation.

“The acceleration of our global refranchising marks a step change in our efforts to refocus the Coca-Cola Co. on its core business of building strong, valuable brands and leading a system of strong bottling partners,” Muhtar Kent explained.

The stock increased 0.52% or $0.22 on February 9, hitting $42.66. About 305 shares traded hands. KO has risen 8.19% since July 6, 2015 and is uptrending. It has outperformed the S&P500 by 17.06%.

From a total of 6 analysts covering Coca-Cola (NYSE:KO) stock, 4 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 67% of the ratings are positive. The highest target price is $54.0 while the lowest target price is $37. The mean of all analyst targets is $45.69 which is 7.10% above today’s ($42.66) stock price. Coca-Cola was the topic of 10 analyst reports since July 21, 2015 according to the firm StockzIntelligence Inc. Stifel Nicolaus upgraded shares on January 12 to a “Buy” rating. Deutsche Bank maintained KO stock in a recent report from September 25 with a “Buy” rating. Finally, Barclays Capital reinitiated the stock with a “Equal Weight” rating in a report they issued on an August 7.

The institutional sentiment increased to 0.93 in Q2 2015. It’s up 0.10, from 0.83 in 2015Q2. The ratio increased, as 73 funds sold all their The Coca-Cola Co shares they owned while 629 reduced their positions. 71 funds bought stakes while 585 increased their total positions. Institutions now own 2.71 billion shares which is 2.50% more than the previous share count of 2.65 billion in 2015Q2.

Allen Holding Inc Ny holds 55.44% of its total portfolio in The Coca-Cola Co, equating to 6.00 million shares. Cook & Bynum Capital Management Llc owns 915,200 shares representing 26.19% of their total US portfolio. Moreover, Capital City Trust Co Fl has 15.76% of their total portfolio invested in the company, equating to 932,503 shares. The Nebraska-based Berkshire Hathaway Inc has a total of 12.6% of their portfolio invested in the stock. Troy Asset Management Ltd, a United Kingdom-based fund reported 5.04 million shares owned.

Since March 3, 2015, the stock had 1 buy, and 4 sales for a total of $12.02 million in net activity. Cummings Alexander B Jr sold 166,630 shares worth $7.13 million. Bozer Ahmet C sold 75,660 shares worth $3.18 million. Gayle Helene D bought 2,000 shares worth $81,074. Eberly Ceree sold 12,400 shares worth $495,380. The insider Douglas J Alexander Jr sold 32,767 shares worth $1.30M.

The Coca-Cola Company is a beverage company. The company has a market cap of $185.14 billion. The Firm owns or licenses and markets more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a range of still beverages, such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. It has 27.34 P/E ratio. It owns and markets a range of nonalcoholic sparkling beverage brands, such as Coca-Cola, Diet Coke, Fanta and Sprite.