Coca-Cola Earnings Set Caution in Beverage Group (KO, PEP, DPS)

The Coca-Cola Company (NYSE: KO) has turned in its first quarter earnings for 2011.  The beverage giant said earnings rose to $1.9 billion, or $0.82 EPS… On an adjusted basis the earnings came to $0.86 EPS.  The numbers a year ago were $1.61 billion in earnings and $0.69 EPS, and Thomson Reuters had estimates for this quarter of $0.87 EPS.

Revenues at Coca-Cola were up over 39% year over year to $10.52 billion against Thomson Reuters estimates of $10.57 billion.  All in all, case volumes were up 6%.  The huge gain in revenues is due in part to the numbers now including its bottling roll-ups. 

One issue the company has brought up is hedging activities on exposure to commodity prices at the new CCE operating units. The hedging would have added $0.01 to EPS, while the company said that the impact of Japan probably took off $0.01 from the reported EPS figures.

The DJIA component is trading down about 1.8% at $66.52 versus a $67.74 close on Monday and against a 52-week trading range of $49.47 to 68.47.  Unfortunately, Coca-Cola shareholders are still in a stock worth less than the peak of the late-1990’s.

Pepsico, Inc. (NYSE: PEP) is down 0.5% at $66.69 and its 52-week trading range is $60.32 to $68.11.

Dr. Pepper Snapple Group, Inc. (NYSE: DPS) is due out with its earnings on Wednesday morning and its shares have yet to trade so far on Tuesday morning.

JON C. OGG