- Coca-Cola reported a solid set of results for the second quarter of 2023, with revenue of $11.97 billion, surpassing market expectations of $11.75 billion by 8.14%. The EPS stood at $0.78, outperforming estimates of $0.72.
- The company has raised its full-year guidance for the second time this year, now expecting organic revenue growth of 8%-9% compared to the prior forecast of 7%-8%.
- The global giant reported a net income of $2.55 billion, equivalent to $0.59 per share, which marks a significant increase from $1.91 billion, or $0.44 per share, during the same period last year. The main drivers of this growth were the ability to raise prices by 10% and resilient demand for its beverages, even in a market where consumers were cutting back on non-essential spending.
- Coca-Cola’s strength lies in its portfolio of about 200 products, including sodas, teas, coffees, energy drinks, low-sugar offerings, bottled waters, and juices. The diverse business model benefits from consumer willingness to pay more for premium brands rather than opting for cheaper private labels.
- All three of the company’s drink divisions reported flat growth for the quarter, but there was a 5% increase in volumes for Coke Zero and Costa Coffee, reflecting the benefits of ongoing product innovation.
- In the results presentation, it was mentioned that supply-side pressures and lower energy prices have eased, which is a positive aspect for the company.
- For 2023, Coke expects comparable adjusted earnings per share growth of 5%-6%, up from the prior forecast of 4%-5%, with strong growth expected from India and China. Having Berkshire Hathaway as a significant investor in Coca-Cola shares, provides a level of comfort to other investors who trust in Warren Buffet’s ability to understand the quality of the underlying business model, and the company’s dominant market position. As a long-term investor, I hold this high-quality share in managed portfolios for my clients.
By Ron Klipin
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