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Coca-Cola (KO) Set to Beat Q2 Earnings: What Should You Know?
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The Coca-Cola Company (KO - Free Report) is expected to register top and bottom-line growth when it reports second-quarter 2023 numbers on Jul 26, before the opening bell. The Zacks Consensus Estimate for the company’s second-quarter revenues is pegged at $11.7 billion, suggesting 3.6% growth from the prior-year quarter’s reported figure.
For second-quarter earnings, the consensus mark is pegged at 72 cents, suggesting a 2.9% rise from the year-ago quarter’s reported figure. The consensus mark has moved up by a penny in the past seven days.
In the last reported quarter, the leading soft drink behemoth’s earnings beat the Zacks Consensus Estimate by 4.6%. The company has delivered an earnings surprise of 4.2%, on average, in the trailing four quarters.
Coca-Cola’s performances in recent quarters have been benefiting from strategic transformation and ongoing recovery around the world. The company’s second-quarter performance is expected to have benefited from revenue growth across its operating segments, aided by an improved price/mix and an increase in concentrate sales. Underlying share gains in at-home and away-from-home channels are also expected to have bolstered the performance.
The company’s volumes in the second quarter are expected to have benefited from the ongoing recovery in markets. Category-wise, volume has been benefiting from growth in trademark Coca-Cola; sparkling flavors; the nutrition, juice, dairy and plant-based beverages; and hydration, sports, coffee and tea categories.
Our model predicts year-over-year organic revenue growth of 7.1% for the second quarter, mainly driven by 7.4% growth of the price/mix, offset by a 0.2% decline in concentrate sales volume. Consequently, reported revenue growth is expected to be 2.9%.
Coca-Cola’s second-quarter results are likely to reflect gains from innovations and accelerating digital investments. The company has been witnessing a splurge in e-commerce, with the growth rate of the channel doubling in many countries. KO has been accelerating investments to build strong digital capabilities. It has been consistently strengthening consumer connections and piloting various digital initiatives through fulfillment methods to capture the online demand, which are likely to have boosted second-quarter sales.
However, Coca-Cola has been witnessing pressures from higher supply-chain costs, including rising commodity input costs and transportation expenses. The pressures from input cost inflation and other costs are likely to have hurt the company’s performance in the second quarter.
Coca-Cola has been investing in its markets and brands to support sales growth, with higher spending on consumer-facing activities. This has led to increased marketing investments in the past few quarters. Rising marketing spending, and growth in short-term incentives and stock-based compensation are expected to have led to increased selling, general and administrative expenses in the second quarter.
As a percentage of sales, we expect SG&A expenses to increase 90 basis points to 29.2% in the second quarter.
On the last reported quarter’s earnings call, the company expected adverse currency rates to hurt the top and bottom lines in the second quarter. It expects a currency headwind of 3-4% on comparable revenues and 2-3% on comparable earnings per share for the second quarter. Additionally, revenues are expected to reflect a 1% negative impact of acquisitions.
Zacks Model
Our proven model conclusively predicts an earnings beat for Coca-Cola this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Coca-Cola has a Zacks Rank #3 and an Earnings ESP of +2.00%.
Other Stocks Likely to Beat on Earnings
Here are some other companies that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat this quarter:
Molson Coors (TAP - Free Report) has an Earnings ESP of +20.90% and sports a Zacks Rank #1 at present. The company is expected to register top and bottom-line growth when it posts second-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.2 billion, which suggests growth of 10% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Molson Coors’ quarterly earnings has moved up 2.7% in the past seven days to $1.51 per share. The consensus mark suggests growth of 28.9% from the year-ago quarter’s reported number. TAP has delivered an earnings surprise of 32.1%, on average, in the trailing four quarters.
Beyond Meat (BYND - Free Report) has an Earnings ESP of +14.60% and a Zacks Rank #2 at present. The company is expected to witness bottom-line growth when it reports second-quarter 2023 results. The Zacks Consensus Estimate for BYND’s quarterly loss has narrowed by 2 cents in the past 30 days to 81 cents per share. The consensus mark suggests a narrower loss from the $1.53 posted in the year-ago quarter.
The Zacks Consensus Estimate Beyond Meat’s quarterly revenues is pegged at $111.3 million, which indicates a decline of 24.3% from the figure reported in the prior-year quarter. BYND posted a positive bottom-line surprise of 8.9% in the last reported quarter. Meanwhile, it has delivered a negative earnings surprise of 14.1%, on average, in the trailing four quarters.
Procter & Gamble (PG - Free Report) has an Earnings ESP of +0.09% and a Zacks Rank #3 at present. The company is slated to witness top and bottom-line growth when it reports second-quarter 2023 results. The Zacks Consensus Estimate for PG’s quarterly revenues is pegged at $19.9 billion, which suggests growth of 2.1% from the figure recorded in the prior-year quarter.
The Zacks Consensus Estimate for Procter & Gamble’s quarterly earnings has been unchanged in the past 30 days at $1.32 per share, suggesting growth of 9.1% from the year-ago quarter’s reported number. PG has delivered an earnings surprise of 1.02%, on average, in the trailing four quarters.
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Coca-Cola (KO) Set to Beat Q2 Earnings: What Should You Know?
The Coca-Cola Company (KO - Free Report) is expected to register top and bottom-line growth when it reports second-quarter 2023 numbers on Jul 26, before the opening bell. The Zacks Consensus Estimate for the company’s second-quarter revenues is pegged at $11.7 billion, suggesting 3.6% growth from the prior-year quarter’s reported figure.
For second-quarter earnings, the consensus mark is pegged at 72 cents, suggesting a 2.9% rise from the year-ago quarter’s reported figure. The consensus mark has moved up by a penny in the past seven days.
In the last reported quarter, the leading soft drink behemoth’s earnings beat the Zacks Consensus Estimate by 4.6%. The company has delivered an earnings surprise of 4.2%, on average, in the trailing four quarters.
CocaCola Company (The) Price and EPS Surprise
CocaCola Company (The) price-eps-surprise | CocaCola Company (The) Quote
Key Points to Note
Coca-Cola’s performances in recent quarters have been benefiting from strategic transformation and ongoing recovery around the world. The company’s second-quarter performance is expected to have benefited from revenue growth across its operating segments, aided by an improved price/mix and an increase in concentrate sales. Underlying share gains in at-home and away-from-home channels are also expected to have bolstered the performance.
The company’s volumes in the second quarter are expected to have benefited from the ongoing recovery in markets. Category-wise, volume has been benefiting from growth in trademark Coca-Cola; sparkling flavors; the nutrition, juice, dairy and plant-based beverages; and hydration, sports, coffee and tea categories.
Our model predicts year-over-year organic revenue growth of 7.1% for the second quarter, mainly driven by 7.4% growth of the price/mix, offset by a 0.2% decline in concentrate sales volume. Consequently, reported revenue growth is expected to be 2.9%.
Coca-Cola’s second-quarter results are likely to reflect gains from innovations and accelerating digital investments. The company has been witnessing a splurge in e-commerce, with the growth rate of the channel doubling in many countries. KO has been accelerating investments to build strong digital capabilities. It has been consistently strengthening consumer connections and piloting various digital initiatives through fulfillment methods to capture the online demand, which are likely to have boosted second-quarter sales.
However, Coca-Cola has been witnessing pressures from higher supply-chain costs, including rising commodity input costs and transportation expenses. The pressures from input cost inflation and other costs are likely to have hurt the company’s performance in the second quarter.
Coca-Cola has been investing in its markets and brands to support sales growth, with higher spending on consumer-facing activities. This has led to increased marketing investments in the past few quarters. Rising marketing spending, and growth in short-term incentives and stock-based compensation are expected to have led to increased selling, general and administrative expenses in the second quarter.
As a percentage of sales, we expect SG&A expenses to increase 90 basis points to 29.2% in the second quarter.
On the last reported quarter’s earnings call, the company expected adverse currency rates to hurt the top and bottom lines in the second quarter. It expects a currency headwind of 3-4% on comparable revenues and 2-3% on comparable earnings per share for the second quarter. Additionally, revenues are expected to reflect a 1% negative impact of acquisitions.
Zacks Model
Our proven model conclusively predicts an earnings beat for Coca-Cola this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Coca-Cola has a Zacks Rank #3 and an Earnings ESP of +2.00%.
Other Stocks Likely to Beat on Earnings
Here are some other companies that you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat this quarter:
Molson Coors (TAP - Free Report) has an Earnings ESP of +20.90% and sports a Zacks Rank #1 at present. The company is expected to register top and bottom-line growth when it posts second-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.2 billion, which suggests growth of 10% from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Molson Coors’ quarterly earnings has moved up 2.7% in the past seven days to $1.51 per share. The consensus mark suggests growth of 28.9% from the year-ago quarter’s reported number. TAP has delivered an earnings surprise of 32.1%, on average, in the trailing four quarters.
Beyond Meat (BYND - Free Report) has an Earnings ESP of +14.60% and a Zacks Rank #2 at present. The company is expected to witness bottom-line growth when it reports second-quarter 2023 results. The Zacks Consensus Estimate for BYND’s quarterly loss has narrowed by 2 cents in the past 30 days to 81 cents per share. The consensus mark suggests a narrower loss from the $1.53 posted in the year-ago quarter.
The Zacks Consensus Estimate Beyond Meat’s quarterly revenues is pegged at $111.3 million, which indicates a decline of 24.3% from the figure reported in the prior-year quarter. BYND posted a positive bottom-line surprise of 8.9% in the last reported quarter. Meanwhile, it has delivered a negative earnings surprise of 14.1%, on average, in the trailing four quarters.
Procter & Gamble (PG - Free Report) has an Earnings ESP of +0.09% and a Zacks Rank #3 at present. The company is slated to witness top and bottom-line growth when it reports second-quarter 2023 results. The Zacks Consensus Estimate for PG’s quarterly revenues is pegged at $19.9 billion, which suggests growth of 2.1% from the figure recorded in the prior-year quarter.
The Zacks Consensus Estimate for Procter & Gamble’s quarterly earnings has been unchanged in the past 30 days at $1.32 per share, suggesting growth of 9.1% from the year-ago quarter’s reported number. PG has delivered an earnings surprise of 1.02%, on average, in the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.