Can Coca-Cola Keep Growing?

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“Coca-Cola is a $156 billion nonalcoholic-beverage kingpin that sold more than $46 billion worth of drinks around the world in 2011. As if it needs underscoring, that’shuge. So when it comes to the future for Coca-Cola, is growth still possible?

“If you tuned into Coke’s fourth-quarter earnings release yesterday, you know that there was still growth to be had in the past year, at least. Comparable earnings per share — which adjusts the tally mainly for oddball adjustments from its bottler acquisition — increased 10% for the year to $3.84.

“There’s been no recession for Coke. In the chart below, you can see that earnings did dip in 2008, but when we consider the total earnings growth over the past five years, it’s clear that the Coca-Cola juggernaut is one that’s not easily knocked off course. 

Source: S&P Capital IQ. 2010 earnings adjusted for gains from bottler acquisition. 

“If we break that total growth down to an average annual figure, we can say that Coke is still growing earnings at a clip of better than 11% per year. To deliver that kind of growth on a relatively consistent basis is no small matter no matter who you are, but it’s even more impressive when you’re a company the size of Coke.

“The company hasn’t been shy about deploying some of its ample cash flow to grow through acquisitions. Of note, in 2007 the company ponied up $4.2 billion to buy Vitaminwater maker Glaceau. More recently, the company took over the North American operations of bottler Coca-Cola Enterprises.”

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