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%).
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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.
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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.
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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