What to look for when Coca-Cola Company (KO) releases Q2 results

The Coca-Cola Company (NYSE: KO) is set to reveal its second-quarter 2024 financial results next week. Over the years, the company has consistently innovated its portfolio and gone far beyond its flagship product. Today, the company offers a wide range of products to meet the needs of customers with different tastes. Taking a cue from the general shift to healthier beverages, it has also introduced sugar-free options.

Coca-Cola shares hit a new record high last session, reflecting investor sentiment ahead of the results. They have been in an upward spiral for about three months now, and have been above their 52-week average during that time. The stock is up about 22% over the past nine months. However, valuations are still good from an investment perspective. This dividend stock has long been a favorite among long-term investors.

Estimation

In the second quarter of 2018, the soft drink giant is estimated to have generated earnings of $0.80 per share, excluding special items. This is higher than the $0.78 per share the company earned in the second quarter of 2023. Analysts were expecting revenue of $11.76 billion, broadly in line with the prior-year results.

Coca-Cola is thriving on solid volume growth and higher prices. Organic revenue, a key metric for consumer businesses, rose 11% in the latest quarter, beating expectations. The strength of the company’s global portfolio, with growing international market share, is helping to offset the impact of soft consumer spending in high-inflation markets like the U.S. and the U.K. The company has boosted advertising and marketing spending this year to attract customers.

Meanwhile, Coco-Cola executives warn that Q2 earnings could include an unfavorable impact of exchange rates of around 8-9%. They also expect second-quarter revenue to include about 6% of currency headwinds. The report is scheduled to be released on Tuesday, July 23, at 6:55 a.m. ET.

From Coca-Cola’s Q1 2024 earnings conference call:

“Innovation is woven into the fabric of our culture and we are encouraged by our innovation pipeline as we look ahead to the rest of 2024. As we navigate the flywheel, we are leaning towards integrated fulfillment to increase basket volume and create additional value for customers. We are working closely with our bottling partners and have moved to larger in-store displays to drive transactions around key events like NCAA March Madness in the US, and we will do so again later this summer during the Olympic and Paralympic Games.”

Q1 results

Over the past seven years, Coca-Cola’s quarterly earnings have consistently exceeded or been in line with market estimates. This trend continued in the first quarter, when adjusted earnings rose 7% year over year to $0.72 per share. First-quarter revenue was $11.3 billion, up 3% year over year. The top line was slightly above estimates, up 7%, North America business segment continued to be the main source of revenue. Operating margin was an impressive 18.9%.

Continuing a rally that began several months ago, Coca-Cola shares rose 1% on Tuesday afternoon after opening higher.