Coca-Cola expects a full-year EPS growth of 6%, up from the previous expectation of 5%. Capital expenditures for the year are expected to be $2.2 billion.
Benefiting from the global demand recovery,coca-cola (KO.US) Q2 revenue and profit exceeded market expectations and raised full-year performance guidance.
On Tuesday, July 23, Coca-Cola announced its second-quarter financial report, which showed:
Revenue: Non-GAAP revenue in the second quarter increased by 2.9% year-on-year to US$12.31 billion (GAAP revenue was US$12.36 billion), higher than market expectations of US$11.76 billion.
Earnings per share: Earnings per share increased by 7.7% year-on-year to $0.84, exceeding market expectations of $0.81.
Net income: Adjusted net income was $2.41 billion.
Gross profit margin: The gross profit margin was 61.1%, an increase of 2.1 percentage points from the same period last year (59.0%).
At the same time, Coca-Cola raised its full-year guidance:
Earnings per share: It is expected that comparable earnings per share will increase by 6% for the full year, previously expected to grow by 5%.
Capital expenditures: Full-year capital expenditures are expected to be US$2.2 billion.
On July 23rd, Coca-Cola once reached a historic high in intraday trading.
James Quincey, Chairman and CEO of Coca-Cola, said in the financial report:
The performance in the second quarter has inspired us. In a rapidly changing market environment, the company achieved stable revenue and operating income growth. Together with our bottling partners, we continue to execute an efficient all-weather strategy. We have confidence in achieving the revised 2024 guidance and long-term goals.
North American sales were weak, and the Asia-Pacific and Latin American markets showed strong growth, with global prices increasing by 9% year-on-year.
Driven by the international market, the quarter-on-quarter unit case volume of Coca-Cola increased by 2%, but it decreased by 1% in North America.
Coca-Cola stated that the sales of its water, sports, coffee and tea, Coca-Cola brand and other soda brands in North America declined, offsetting the growth of its juice, dairy and plant-based beverages. Coca-Cola's competitor PepsiCo stated earlier this month that weakening consumer demand in the United States has hurt its demand for its own sodas and snacks.
In terms of business segments, the carbonated soft drink unit of Coca-Cola (including its namesake soda) increased global sales by 3% in the second quarter, thanks to strong demand in the Asia-Pacific and Latin American regions.
The sales of juice, dairy and plant-based beverages increased by 2%, while the sales of water, sports, coffee and tea units remained flat, mainly due to shrinking demand for bottled water and a drop in Costa Coffee sales in the UK.
In addition, Coca-Cola's overall prices rose 9% compared to the same period last year, but about half of them were from markets such as Argentina experiencing severe inflation.
Although Coca-Cola raised its full-year performance guidance, it is expected that foreign exchange will drag down its performance again in the third quarter. The company expects comparable net sales to be adversely affected by 4% exchange rates, and comparable earnings per share will be adversely affected by 8% exchange rates.
Editor/Somer