Coca-Cola 2012 3Q financial analysis 2012 November 04 Companies 2012 3Q results are slightly positive.

Overall past 5 years show stable revenue and Net income growth. If comparing 3Q accumulative last 12 month results (2012 9 months+20114Q) with 2011Y revenue has increased from 46,5 bn.$ to 47,6 bn.$ or +2,2%. Net income has increased from 8,6 bn.$ to 8,8 bn.$ or +2,7%. This growth is quite good if taking into account overall world economy growth slowdown. Larger Revenue and Net Income growth at Y2011 was due to CCE bottling company acquisition. 2010Y financial results have 4,7 bn.$ Net income exuded for unusual items to have a better view of companies generated usual income. Coca-cola main income is from its original North America. There company sale almost 1/2. Since US economy is recovering further growth can be expected. In 2010 companies acquired bottling segments has 2,2 bn.$ or ~17% of total group sales. In general companies results are slightly positive. Companies balance sheet has issues with equity level. Which has droped quite a lot from good 51% at Y2008 and Y2009 to only 38% now. Another issue is Return on equity. It is stable 27%. But knowing that Equity level has decreased quite a lot that is a bad thing. Major decrease was in Y2010, since then equity level has not improved due to increased level of profit sharing with companies shareholders trough share repurchase and dividends. If at Y2008-2009 68-69% of Net Income was spent on Dividends then in 2010-2011 it increased to 75% and 84% so company is basically paying out everything that it earns and not leaving a lot in the company, which is not good for companies long term growth. At first 9 month of Y2012 this level stays at high 80%. On the other hand its not over 100% like in some other companies. At Y2010 company has acquired major bottler CCE with its quite large amount of debts. Although this has increased companies diversification but its ratios has worsened. It would be nice to see company accumulating more equity and deceasing debt level to return into stable balance sheet like it was at Y2009. In general companies balance structure is bit risky.

Share value: Equity / share 33,2 bn.$ 4,486 bn. 7,4 $/sh. Market value 37,1 $ +29,7$ 15,1 years Year Net income before Depreciation 8,8 bn.$ +1,96$/sh. 5,3% Companies share book value is ~7,4$. Current market price is ~37$ which shows that market is paying ~29,7$ more, or more then 15 years of Net Income, which is 8,8 bn.$. This is quite a lot taking into consideration that companies balance structure is a bit risky. Share profitability (Share market price/Net income before Depreciation) is only 5,3% which is lower then average. The only risk lowering factor is stable sector consumer good production. In general share value is very high. Company at the moment pays 1,02$/share annual dividends (0,255$/quarter) before tax or 2,7% investment yield, which is average. Payout ratio is around 50%, which is normal and well balanced cash flow management. 5 year analysis show stable EPS and dividend growth, which is good. Company can be treated as long term stable growth stock. Investment is good for portfolio diversification but to pricey for heavier investment unless it would drop below 32$ or so.