Coca-Cola has always been one of my favorite companies.
They are the perennial safety play, a reliable grower that pays a 2.9% dividend and was one of the first companies we snapped up when the World went on sale in the '08-'09 crash. Our faith in the company was well justified in the recent earnings report. Despite weak North American sales growth (2%) and flat growth in Europe, International sales grew at a tremendous clip with 11% volume increases in the Pacific and 12% increases in Eurasia/Africa. Best of all, those growth rates are "currency neutral net revenues" - so we are comparing apples to apples here - unlike many other companies who report their earnings in declining dollars.
On the last day of the quarter, the company closed their transaction for CCE's North American business, an acquisition that will poise the company for further growth in the years ahead. What struck me the most about the report was the way Coca-Cola looks at the World. Coke doesn't divide the World into North or South or East and West, Coke sees two kinds of countries - the ones with PER CAPITA consumption of more than 150 eight-ounce servings of Coke-brand products per year and the ones that they need to work harder in.
Also impressive is the company's plan to repurchase $2Bn of their stock back BY THE END OF 2010. This will be fairly easy for the company to do as cash from operations has already increased 15% in the first 3 quarters of the year. Since we already know and love KO and, since we already know how to read an earnings release, I decided not to squander my time talking to Mr. Kent about clarifying product revenue steams in Guiana - that's what conference calls are for!
