The Coca-Cola Co. (KO, Financial) reported its second-quarter results on July 26, posting earnings and revenue that topped estimates.
The company’s adjusted earnings per share for the quarter were 59 cents, beating estimates of 57 cents. Likewise, revenue of $9.7 billion beat expectations of $9.6 billion.
After the announcement, Coca-Cola shares gained 1.5% in premarket trading before reversing and falling to open at $44.55. The stock closed at $45.24 on Tuesday.
Despite the beats, the company’s net revenue declined 16% to $9.7 billion due to headwinds from refranchising efforts and foreign currency exchange.
The graph below illustrates Coca-Cola’s revenue growth since December 2005.
For the quarter, Coca-Cola reported its net income fell to $1.37 billion, or 32 cents per share, from $3.45 billion, or 79 cents per share, a year ago.
Overall, Coca-Cola’s total unit case volume was flat for the quarter.
The company did see some success with its healthier products, which are low in sugar and free of carbonation. Its case volumes for juice, dairy and plant-based beverages increased 3% globally. Coca-Cola also reported the case volume for water, enhanced water and sports drinks was up 1%, and tea and coffee was up 2%.
As the company continues to expand its low- and no-calories sparkling soft drinks, it saw an increase in unit case volumes. The company plans to release Coca-Cola Zero Sugar in the U.S. in August after witnessing double-digit growth in Europe, Latin America, the Middle East and Africa.
In his first earnings call as president and CEO, James Quincey, who stepped into the role after Muhtar Kent resigned in May, said the company’s results reflect the progress it has made in transforming into “a total beverage company” and is positive its growth will continue to gain momentum.
“Not only did we see strong performance during the quarter in rapidly expanding areas of our company, such as our innocent juice and smoothie business in Europe, our organic revenue growth in sparkling soft drinks was led by innovation in and marketing support for our low- and no-sugar options like Coca-Cola Zero Sugar, which continues to roll out around the world,” Quincey said.
The company also updated its earnings guidance for the year. Coca-Cola expects EPS to be flat to a 2% drop, up from the previous forecast of 1% to 3% declines. Its organic revenue guidance is expected to grow 3%, and the company said its full-year performance outlook remains unchanged.
“Our performance gives us confidence that we will achieve our full-year financial objectives even in the face of challenging conditions, and also demonstrates further success in evolving our portfolio to meet changing consumer tastes and preferences,” Quincey said. “While we are in a period of substantial transformation and change that is never easy, I am encouraged by the spirit of our people and partners as we reinvent the company for the future."
Disclosure: I do not own any stocks mentioned.
