The Coca-Cola Company (KO, Financial) reported its second quarter earnings before the opening bell on Wednesday, July 27. The Dow Jones Industrial Average company missed its revenue estimate and beat its earnings per share expectation. Revenue for the quarter was $11.54 billion, missing analysts’ average estimate by $100 million. Earnings per share for the quarter were 60 cents, beating analysts’ average estimate by 0.02 cents.
Total revenue for the company was down 5% from the comparable quarter. Earnings per share for the quarter were also lower with a comparable quarter decrease of 5%.
The global consumer beverage company's sales were down in almost every geographic region in the second quarter when compared to the second quarter of 2015. North America was the only global region to show increased sales revenue for the second quarter. In North America, revenue was 2% higher than the comparable quarter at $2.709 billion. For the second quarter, North America accounted for nearly 25% of the company’s total sales. Bottling investments, the company’s leading revenue generator, accounting for approximately 50% of total sales with sales revenue down 12% from the comparable quarter.
Operating income for the quarter was up 13% from the comparable quarter. Bottling investments reported leading operating income growth from the comparable quarter with an increase of 31%. Bottling investments, however, only accounted for approximately 10% of total operating income. Geographic segments reporting the greatest majority of operating income included Europe, Asia Pacific and North America.
The quarter was slightly disappointing for Coca-Cola and shares fell 3.34% on Wednesday to close at $43.40. Analysts will be watching for the third quarter numbers, which are projected to show a decrease of 8.30% in comparable quarter sales. Organic growth is also trending lower for the company. In the second quarter, organic revenue growth was 3%, however, analysts are targeting quarterly organic revenue growth of 4% to 6%. The company’s branding strategy and achievement towards its 2020 vision goals are also dragging slightly on results. Overall, for investors, the second quarter showed weakening sales and profit with a slightly weaker outlook. The second quarter results have significantly lowered the stock price, which is down 5% for the week and now has a year to date return of 1.51%.
Disclosure: I do not own any shares of Coca-Cola.
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