With a new chief executive at the helm, Coca-Cola on Wednesday reported earnings and revenue that topped analysts’ expectations.
Though, the company posted another drop in profit as Coca-Cola completes its refranchising plans, which were expected to take a toll on financials until completed.
Here’s what the company reported vs. what Wall Street was expecting:
- Earnings per share: 59 cents adjusted compared to an estimate of 57 cents adjusted, according to Thomson Reuters analysts’ consensus
- Revenue: $9.702 billion compared to a forecast of $9.652 billion
“Our second quarter results demonstrate continued progress against the strategic priorities we have laid out to accelerate the transformation of our business into a total beverage company with balanced growth across a consumer-centric portfolio,” new CEO James Quincey said in a statement.
Former Coca-Cola CEO Muhtar Kent has now stepped down and was replaced by Quincey, who had previously been serving as the company’s chief operating officer. This second quarter marks Quincey’s first earnings report as CEO of Coca-Cola.
“Not only did we see strong performance during the quarter in rapidly expanding areas of our Company, such as our innocent juice and smoothie business in Europe, our organic revenue growth in sparkling soft drinks was led by innovation in and marketing support for our low- and no-sugar options like Coca-Cola Zero Sugar, which continues to roll out around the world,” Quincey added.
Shares of Coca-Cola’s stock were climbing about 1.5 percent in premarket trading following the earnings release.
Coca-Cola’s net revenues for the quarter fell 16 percent to $9.7 billion, impacted by the company’s ongoing efforts to refranchise its bottling territories. Foreign currency exchange headwinds also drug that figure down, Coca-Cola said.
Macroeconomic challenges have been one concern for the company and many of its peers, including PepsiCo, of late.
Meantime, Coca-Cola is divesting from its U.S. bottling operations, with a self-imposed deadline to complete the reorganization by year’s end. The company had warned earlier this year that its 2017 profit would drop as a result of these efforts.
During the second quarter, Coca-Cola said on Wednesday that the company was able to achieve “substantial progress,” which included transforming the business’ beverage portfolio, reducing Coca-Cola’s sugar footprint and growing in global markets.
CEO Quincey has made it clear he wants to focus on boosting Coca-Cola’s sales of smaller-sized packages and no-calorie sparkling beverages to meet the needs of consumers looking for healthier options.
He told CNBC on Wednesday that Coca-Cola saw “nice results” in the juice and dairy categories during the quarter, adding that the re franchising was going “almost miraculously smooth.”
Coca-Cola continues to see headwinds in emerging markets such as Brazil and Venezuela, Quincey added. But developed economies — Europe and North America — are delivering stronger results, he said.
Coca-Cola said on Wednesday that low- and no-calorie sparkling soft drinks grew unit case volume in the mid-single digits during the quarter, as the company continues to expand its reduced-sugar offerings globally. Coca-Cola Zero Sugar, for example, will hit the U.S. in August after seeing double-digit growth in Europe, the Middle East and Africa, and Latin America.
As of Tuesday’s close, shares of Coca-Cola are down less than 1 percent over the past 12 months, but the stock is up about 9 percent for the year.
This is a developing story. Please check back for updates.
Source: FactSet