Coca-Cola stops shares decline after Q2 earnings report

Coca-Cola (KO.US) beat Wall Street's revenue and profit expectations and, like Pepsico, raised its full-year outlook. The company conveyed that it continues to see buoyant demand for its products despite multiple rounds of price increases for products in its portfolio, with the next price hikes occurring in Q1. Net sales rose 6% y/y but weaker sentiment on Wall Street today put downward pressure on the giant's stock valuation:

• Revenues: $11.97 billion vs. $11.75 billion forecasts 
• Earnings per share: $0.78 vs $0.72 forecasts
• Net income: $2.55 billion vs $1.91 billion in Q2 2022

The company expects comparable earnings per share growth in the range of 5% to 6% vs. 4% to 5% previously. It raised revenue forecasts where it estimates growth of 8% to 9%, vs. 7% to 8%. Coca Cola Q2 raised product prices again citing higher production costs. The pricing policy still has not yet triggered a significant drop in demand, which reassures the company that the strategy is having the right effect.

At the same time, global unit volumes (unaffected by price and exchange rate changes), and in the US, declined just 1% (demand for Powerade and carbonated beverages fell) All three beverage divisions posted flat growth but Coca Cola Zero volumes rose 5% thanks to strong demand in North America. Similarly, Costa Cofee's division grew (5% y/y) and the Fairlife milk brand popularity in the US is growing.

Coca-Cola shares (KO.US), D1 interval. The company's shares halted the sell-off after the results near the key support of $61, at the SMA200 (red line). Source: xStation5