Coca-Cola (KO) delivered better than expected results for the second quarter ended July 1, 2022. Revenue and earnings came in above consensus estimates, demonstrating resilience in the marketplace amid ongoing global challenges.
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Following the solid results, Coca-Cola shares increased 1.64% on Tuesday.
Revenue and Earnings Surpassed Estimates
Coca-Cola posted a 12% increase in revenue, which came in at $11.3 billion. The figure beat consensus estimates of $10.54 billion. Organic revenues were up 16% from the year-ago quarter, driven by strong performance across operating segments.
Coca-Cola delivered earnings per share of $0.70, representing a 4% increase from the year-ago period. The figure topped analysts’ estimates of $0.67 a share.
The operating margin declined to 30.7% in Q2 2022 compared to 31.7% in the year-ago period. It was driven by strong topline growth, higher operating costs, and an increase in marketing investments. In addition, operating income declined 22%, hurt by a 7-point currency headwind.
Other Key Metrics’ Performance
Unit case volume globally grew 8% across all operating segments. The increase was driven by a recovery in away-from-home channels and ongoing investments in the marketplace. Price/mix was up 12% from the year-ago quarter, driven by pricing actions in the marketplace across operating segments.
Management’s Commentary
“Our results this quarter reflect the agility of our business, the strength of our streamlined portfolio of brands, and the actions we’ve taken to execute for growth in the face of challenges in the operating and macroeconomic environment,” said James Quincey, Chairman and CEO.
Wall Street is Optimistic About Coca-Cola Stock
The Street is bullish about the stock, with a Strong Buy consensus rating, based on eight Buys and two Holds. The average Coca-Cola price target of $70 implies around 11% upside potential from current levels.
Bullish Bloggers’ Opinion
TipRanks data shows that financial bloggers’ opinions are 84% Bullish on KO, compared to a sector average of 64%.
Key Takeaway for Investors
Coca-Cola’s second-quarter results affirm resilience in the core business even as the company faces a challenging business environment hurt by inflationary pressures. The company is expected to record solid full-year results if it can find ways to offset the loss in Russia.
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