Coca-Cola tops earnings expectations as diet drinks fuel global growth
- Coca-Cola reported second-quarter earnings and revenue that beat analysts’ expectations.
- Coke has been focused on globalizing its brands, like Coca-Cola Stevia No Sugar and dairy-free smoothie brand AdeZ.
- Coke clocked the strongest organic sales growth in Europe, Middle East & Africa and Latin America, while organic sales in North America dropped 1 percent.
Coca-Cola on Wednesday reported second-quarter earnings and revenue that beat analysts’ expectations, bolstered by its efforts to bring its diet drinks around the world.
During the quarter, the company launched its dairy-free smoothie brand AdeZ in Europe and debuted Coca-Cola Stevia No Sugar in New Zealand. It also brought its revamped Diet Coke campaign to Great Britain, following its previous launch in the U.S.
Here’s how the company did compared with Thomson Reuters estimates:
- Adjusted earnings per share: 61 cents vs. 60 cents forecast
- Revenue: $8.90 billion vs. $8.54 billion forecast
The company reported net income of $2.32 billion, or 54 cents a share, up from earnings of $1.37 billion, or 32 cents a share during the same quarter a year ago.
After adjusting for continuing operations and other items, Coke said it earned 61 cents a share, which was a penny better than analysts were expecting, according to analysts surveyed by Thomson Reuters.
Earnings from continuing operations rose 68 percent to 53 cents a share.
Coke said revenue fell 8 percent to $8.90 billion from the previous year, but sales surpassed expectations because the decline was anticipated as the company worked on refranchising its bottling operations. It said volume grew 2 percent, driven in part by double-digit growth for Coca-Cola Zero Sugar. Its water and sports drinks, which includes brands like Powerade, grew 4 percent.
Coke said second-quarter organic sales, which strips out the impact of foreign currency fluctuations, grew 5 percent. It clocked the strongest organic sales growth in Europe, Middle East & Africa and Latin America, with growth of 7 percent and 11 percent, respectively.
Those regions helped to counteract weakness North America, where Coke’s organic sales dropped 1 percent.
Volume in the region grew one percent, dragged drown by weakness in its juice brands like Minute Maid. The company attributed that decline to smaller packaging and a shift away from its less profitable juice drinks.
Its carbonated drinks like Coca-Cola Zero Sugar, meantime, posted double digit volume growth.
For the year, Coke says it expects at least 4 percent growth in organic revenue and at least 9 percent growth in its adjusted net income.
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