Coca-Cola on Tuesday reported stronger than expected quarterly earnings on growing sales as the Atlanta-based beverage behemoth saw growth in most of its global markets.
Revenue for the second quarter was $12.4 billion, 3% higher than the same period of 2023, while earnings were 84 cents per share, 7% better than a year ago. Profit margins were up as well, as the company reported growth in every region except Asia.
The encouraging performance came “in an ever-changing landscape,” said James Quincey, chairman and chief executive officer of the company. “We are encouraged with our second quarter results.”
An average of analyst predictions had placed expectations for revenue at $11.76 billion and earnings per share at 81 cents.
On the strength of the solid quarter and its current momentum, the company raised its guidance for the coming year, telling analysts that its current operations should produce about 10% more revenues and 8% to 9% higher earnings per share.
As a global company, Coca-Cola has been coping with differences in the value of many national currencies, which lately have often been driven by inflation. Rising prices, a problem in the entire developed world coming out of the pandemic, have been dramatically lower in the United States but are still a problem in many places.
Some of the past quarter’s revenue results are “eye-popping,” but because of the outsized role played by inflation overseas, “the figures were somewhat misleading,” said Dave Novosel, analyst at GimmeCredit, a research company.
Even so, the financial performance was very solid, especially the wider profit margins, he said. “Nevertheless, the results point to robust organic growth, marked by double-digit growth in every geographic region except Asia Pacific.”
The news sent Coca-Cola stock up in early trading, although it dipped as the day went on. In midafternoon, Coca-Cola was trading at $65.19 a share, up 41 cents from its opening.
The company has about 4,000 employees based in Atlanta.
Wall Street has been generally embracing Coca-Cola since last fall when it hit a 52-week low of $52.38 a share. Coca-Cola stock in recent days has been trading near its 52-week high of $65.74 a share, which it hit last week.
Garrett Nelson, senior equity analyst at CFRA Research, said Tuesday he is raising his estimate for where Coca-Cola stock will be in coming months.
His 12-month “target” for Coca-Cola is now $72 a share, up $4, he said. “We see additional room for the stock to run to the upside.”
Nelson rated company stock a “buy.”
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