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The Zacks Rank #2 (Buy) soft drink bellwether Coca-Cola Company (KO - Free Report) reported earnings yetserday and Zacks Rank #2 PepsiCo Inc. (PEP - Free Report) reported today. Both giants came up with upbeat earnings, auguring well for the consumer staples sector. Let’s delve a little deeper.
Coca-Cola Beats Overall, Retains View
The Coca-Cola Company has reported better-than-expected top and bottom-line results for first-quarter 2023. Earnings and sales also improved year over year and surpassed our estimate in the quarter. The company’s results have benefited from its continued business momentum. KO reiterated its view for 2023.
Comparable earnings of 68 cents per share grew 5% from the year-ago period and beat the Zacks Consensus Estimate of 65 cents. Meanwhile, comparable earnings surpassed our estimate of 64 cents. However, unfavorable currency translations hurt comparable earnings by 7 percentage points. Comparable currency-neutral earnings per share rose 13% year over year.
Revenues of $10,980 million surpassed the Zacks Consensus Estimate of $10,853 million and improved 5% year over year. Revenues also beat our estimate of $10,681.6 million. Organic revenues rose 12% from the prior-year quarter. Coca-Cola’s top line benefited from strong revenue growth most across its operating segments, aided by an improved price/mix and increased concentrate sales.
PepsiCo came out with quarterly earnings of $1.50 per share, beating the Zacks Consensus Estimate of $1.37 per share. This compares to earnings of $1.29 per share a year ago. This quarterly report represents an earnings surprise of 9.49%. Over the last four quarters, the company has surpassed consensus EPS estimates four times.
PepsiCo posted revenues of $17.85 billion for the quarter ended March 2023, surpassing the Zacks Consensus Estimate by 3.76%. This compares to year-ago revenues of $16.2 billion. The company has topped consensus revenue estimates four times over the last four quarters.
PepsiCo's first quarter results have exceeded expectations, driven by the strong demand for its beverages and snacks. The company's organic revenue growth for its global beverages business rose 12% and convenient foods business organic revenue rose 16%. With consumer demand remaining resilient, PepsiCo raised prices by 16% in the first quarter of 2023.
The company has lifted its outlook for 2023. The company now expects organic revenue to rise 8% and adjusted earnings to be up 9% from a year ago. This is an increase from previous forecasts of 6% and 8%, respectively.
Against this backdrop, investors may be interested in knowing about the Coke and PepsiCo-heavy ETFs along with their stocks. This is because an ETF approach offers one to bet on both stocks.
ETFs in Focus
Coca-Cola and PepsiCo each has exposure to funds like iShares Evolved U.S. Consumer Staples ETF, Consumer Staples Select Sector SPDR Fund (XLP - Free Report) , Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) and Vanguard Consumer Staples ETF (VDC - Free Report) in the range of 8% to 11%.
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Coke-PepsiCo Earnings Impress: ETFs to Benefit
The Zacks Rank #2 (Buy) soft drink bellwether Coca-Cola Company (KO - Free Report) reported earnings yetserday and Zacks Rank #2 PepsiCo Inc. (PEP - Free Report) reported today. Both giants came up with upbeat earnings, auguring well for the consumer staples sector. Let’s delve a little deeper.
Coca-Cola Beats Overall, Retains View
The Coca-Cola Company has reported better-than-expected top and bottom-line results for first-quarter 2023. Earnings and sales also improved year over year and surpassed our estimate in the quarter. The company’s results have benefited from its continued business momentum. KO reiterated its view for 2023.
Comparable earnings of 68 cents per share grew 5% from the year-ago period and beat the Zacks Consensus Estimate of 65 cents. Meanwhile, comparable earnings surpassed our estimate of 64 cents. However, unfavorable currency translations hurt comparable earnings by 7 percentage points. Comparable currency-neutral earnings per share rose 13% year over year.
Revenues of $10,980 million surpassed the Zacks Consensus Estimate of $10,853 million and improved 5% year over year. Revenues also beat our estimate of $10,681.6 million. Organic revenues rose 12% from the prior-year quarter. Coca-Cola’s top line benefited from strong revenue growth most across its operating segments, aided by an improved price/mix and increased concentrate sales.
PepsiCo Reports Above Expectations; Lifts Guidance
PepsiCo came out with quarterly earnings of $1.50 per share, beating the Zacks Consensus Estimate of $1.37 per share. This compares to earnings of $1.29 per share a year ago. This quarterly report represents an earnings surprise of 9.49%. Over the last four quarters, the company has surpassed consensus EPS estimates four times.
PepsiCo posted revenues of $17.85 billion for the quarter ended March 2023, surpassing the Zacks Consensus Estimate by 3.76%. This compares to year-ago revenues of $16.2 billion. The company has topped consensus revenue estimates four times over the last four quarters.
PepsiCo's first quarter results have exceeded expectations, driven by the strong demand for its beverages and snacks. The company's organic revenue growth for its global beverages business rose 12% and convenient foods business organic revenue rose 16%. With consumer demand remaining resilient, PepsiCo raised prices by 16% in the first quarter of 2023.
The company has lifted its outlook for 2023. The company now expects organic revenue to rise 8% and adjusted earnings to be up 9% from a year ago. This is an increase from previous forecasts of 6% and 8%, respectively.
Against this backdrop, investors may be interested in knowing about the Coke and PepsiCo-heavy ETFs along with their stocks. This is because an ETF approach offers one to bet on both stocks.
ETFs in Focus
Coca-Cola and PepsiCo each has exposure to funds like iShares Evolved U.S. Consumer Staples ETF, Consumer Staples Select Sector SPDR Fund (XLP - Free Report) , Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) and Vanguard Consumer Staples ETF (VDC - Free Report) in the range of 8% to 11%.