Coca-Cola beats profit estimates, registers $11.1 billion revenue in Q2

The Atlanta-based soft drink manufacturer, whose products include Fanta sodas, Minute Maid juices, and Powerade sports drinks, claimed on Tuesday that bundling various quantities and combinations of its goods for consumers who were concerned about inflation was advantageous.

Coke’s net income rose 14% to $2.8 billion. Adjusted for one-time items, the Atlanta company earned 69 cents per share. That also beat analysts’ forecasts of a 64-cent profit.

According to the business, volume rose 4% globally and organic sales growth for the entire year will now be between 14% and 15%. Coca-Cola’s adjusted operating revenue for the three months ending 30 September was $11.1 billion. This was ahead of the $10.5 billion Wall Street forecast, according to analysts polled by FactSet.

The improved estimate for the year demonstrates that Coca-Cola is keeping up with demand thanks to products like the Coca-Cola Value Bundle, which gives customers access to a variety of beverages at lower costs.

Chief Financial Officer John Murphy said in an interview, “When you segment the population, there are certain groups that are going to be under more pressure than others. It’s an opportunity to offer them solutions at a price point that will be effective to them.”

Sales of sparkling soft drinks rose 3%, led by strong demand for Coca-Cola Zero Sugar. Sports drinks and flavoured waters gained 6%, while coffee sales rose 5% as Costa stores rebounded from pandemic-related closures last year. Juice and dairy sales were flat.

Coca-Cola said that their ready-to-drink alcoholic beverages, which include Schweppes cocktail mixers and tonics, Topo Chico hard seltzers, and Fresca Mixed mixed drinks, are performing well.

According to the corporation, customers kept visiting public places like theatres, stadiums, and restaurants, and freight prices in some countries, like China, were going down.

“I think there has been a reduction in both the container costs and a reduction in demand,” Murphy said. But within the US, he said, fuel and labor shortages continue to keep freight transportation costs high. “We will continue to see relatively high costs for trucking,” he said.

Coca-Cola’s organic revenue rose by 16% in the third quarter, excluding the effects of currency fluctuations and acquisitions. Analysts had projected a gain of 9.8%.

In premarket trade, the shares increased by 0.6%. Through Monday’s close, the stock had fallen 2.8% for the year; this is a better performance than the S&P 500 Index’s 20% decrease.

PepsiCo Inc., a significant rival, earlier this month boosted its forecast for organic revenue growth from 10% to 12%.

(With inputs from agencies)