Atlanta-based beverage giant Coca-Cola on Wednesday reported strong financial growth for the past quarter and predicted robust results the rest of the year.
The iconic company had revenues of $12.0 billion for the three months ending June 30, up 6% from the same period last year, while earnings per share climbed 34%, company officials said during a morning teleconference with analysts and reporters.
“Our industry is strong and we believe we have significant headroom to grow,” said James Quincey, chairman and chief executive of Coca-Cola during the teleconference. “We feel confident about the second half of the year.”
Coca-Cola expects revenue growth of 8% to 9%, slightly higher than the company’s projection made at the end of the previous quarter. Coca-Cola said it expects profit per share to rise 5% to 6% this year, also slightly more than the earlier prediction.
The Coca-Cola workforce took some hits in the aftermath of the 2008 recession as the company moved to trim costs. The pandemic also prompted a restructuring and more layoffs. Long the brand most associated with Atlanta, Coca-Cola now has about 82,000 employees, including about 8,100 in metro Atlanta.
The company’s global business has weathered a year of sometimes painful inflation, as well as the need any global business has to account for swings in the value of many different currencies against the dollar. Moreover, economies are still emerging from the changes in behavior and expectations caused by the pandemic.
While many factors are in flux, the overall trajectory has been away from chaos, Quincey said. “A principal feature is a renormalization post-COVID.”
While some critical food components — like sugar and juice — are still seeing increases in prices, many other materials are not, he said. “Inflation pressures are beginning to moderate.”
The company, like many competitors, raised prices of many of its products significantly in the past year. And — also like many competitors — Coca-Cola saw some slippage in the volume of some products sold. The total mix of prices charged for its products is up about 10% from a year ago, the company said.
That was unavoidable, Quincey said. “The higher inflation gets, the more you have to follow it.”
Coca-Cola earnings were better than the consensus of analyst expectations, continuing a 6-year streak, according to Garrett Nelson, stock analyst at CFRA.
Nelson said he continues to rate Coca-Cola a “buy,” projecting that its stock price will rise at least $2 a share to $68 within the next year.
In early afternoon, shares of Coca-Cola were trading at $62.99 a share, up 74 cents. Over the past 12 months, Coca-Cola’s lowest closing price was in late October, when it closed at $54.39 a share.
PepsiCo in recent weeks also raised its annual revenue and profit forecasts, also beating second-quarter results.
Some analysts said expectations of a strong second-half for beverage companies like Coca-Cola depend on whether consumers buy more as inflation ebbs.
“This whole idea of resiliency likely becomes less topical as we get into the back half of the year and pricing begins to come down,” Wedbush analyst Gerald Pascarelli told Reuters.
Coca-Cola officials Wednesday made no mention of the recent report by an arm of the World Health Organization that aspartame — an ingredient in Diet Coke and Coca-Cola Zero Sugar — may be a possible human carcinogen.
Neither did the roughly half-dozen analysts’ questions include any reference to that issue.
Aspartame is also used in Diet Pepsi and many other products. Various other health agencies have declared aspartame safe, at least in any moderate amount.
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