Coca-Cola Co. (KO) posted better-than-expected second quarter earnings Tuesday, and boosted its full-year sales forecast, as price hikes helped revenues rise firmly ahead of overall volumes.
Coca-Cola said adjusted non-GAAP earnings for the three months ending in September were pegged at 69 cents per share, up 6.2% over the same period last year and five cents ahead of the Street consensus forecast.
Group revenues, Coca-Cola said, rose 10.6% to $11.1 billion, a figure that firmly topped analysts’ estimates of a $10.52 billion tally. Case volumes, however, were only up 4%. Organic revenues were up 16% and the group’s operating margin narrowed by 100 basis points to 27.9%.
Looking into the 2022 financial year, Coca-Cola said it sees organic revenue growth of between 14% and 15%, up from its prior forecast of between 12% and 13% and comparable earnings growth of between 15% to 16% from 2021 levels .
“Our strong capabilities and consumer insights continue to help us win in the marketplace,” said CEO James Quincey. “Our business is resilient amidst a dynamic operating and macroeconomic environment. We are investing in our strong portfolio of brands, which is a cornerstone of our ability to deliver long-term value for our stakeholders.”
Coca-Cola shares were marked 2.7% higher in pre-market trading following the earnings release to indicate an opening bell price of $59.13 each.
Earlier this month, rival PepsiCo (PEP) topped Street earnings forecast with a bottom line of $1.97 per share, with revenues rising 8.3% to $21.97 billion, thanks in part to a 20% surge in sales from the north American arm of Frito Lay, the group’s snacks division.
Price hikes powered the revenue surge at Frito Lay, and offset an overall 2% decline in volumes, while offsetting a softer-than-expected gain of 3.6% in beverage sales, which were pegged at $6.635 billion.