Coca-Cola (KO) rose 1.9% in afternoon trading after beating analysts’ second quarter earnings expectations on strong volumes, despite an increase in commodity costs by $300 million compared to a year ago.
For the quarter ended June 29, Coca-Cola reported a profit of $2.79 billion, or $1.21 a share, down from $2.8 billion, or $1.20 per share compared to a year ago and a 2.7% increase in revenue to $13.09 billion. Analysts had expected $1.19 of EPS.
Additionally, Coca-Cola reported its unit case volume had risen by 41% alongside global volume growth of 4% in the quarter and 5% year-to-date.
Coca-Cola�s commodity costs were offset by a decrease in the price for aluminum, plastic and other materials.
“We are pleased with our second quarter and year-to-date results,� said CEO and Chairman Muhtar Kent. �We are delivering consistent quality performance in line with our 2020 Vision growth targets, despite a very challenging and increasingly unpredictable global economy. �
Wells Fargo analyst Bonnie Herzog maintained Coca-Cola at Outperform on the news and noted the rise in global growth as a positive.
In an update, Herzog writes, �Coca-Cola delivered another solid and better than expected quarter in an increasingly challenging macro environment. We think today’s results will be perceived by the market as confirmation of Coca-Cola’s durability and we expect the shares to react favorably. We recommend investors continue to build positions and maintain our Outperform rating.�
– Grace L. Williams
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