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Coke, PepsiCo Earnings Should Drive Consumer Staples ETFs
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The Zacks Rank #3 (Hold) soft drink bellwether Coca-Cola Company (KO - Free Report) reported earnings on Jul 26 before market open and Zacks Rank #2 (Buy) PepsiCo Inc. (PEP - Free Report) reported results in mid-July. Both companies beat overall and raised view. Let’s delve a little deeper.
Coca-Cola Earnings in Details
The Coca-Cola Company (KO - Free Report) has reported better-than-expected top and bottom-line results for second-quarter 2023. Earnings and sales also improved year over year. The company’s results have benefited from its continued business momentum. KO has raised its view for 2023. Shares rose 1.3% in the key trading season post reporting earnings.
Comparable earnings of 78 cents per share grew 11% from the year-ago period and beat the Zacks Consensus Estimate of 72 cents. However, unfavorable currency translations hurt comparable earnings by 6 percentage points.
Comparable currency-neutral earnings per share rose 17% year over year. Revenues of $11,972 million surpassed the Zacks Consensus Estimate of $11,734 million and improved 6% year over year. Organic revenues rose 11% from the prior-year quarter.
Management anticipates organic revenue growth of 8-9% for 2023 compared with 7-8% growth expected earlier. Comparable currency-neutral earnings per share are estimated to increase 9-11% versus 7-9% growth mentioned earlier. The company anticipates year-over-year comparable earnings per share growth of 5-6% for 2023 compared with 4-5% growth stated earlier.
Its comparable earnings per share growth is likely to include a headwind of 4-5% from currency, and a slight headwind from acquisitions and divestitures. The company previously anticipated a 3-4% currency headwind on comparable earnings per share.
PepsiCo Earnings in Detail
PepsiCo has reported robust second-quarter 2023 results, wherein revenues and earnings surpassed the Zacks Consensus Estimate. The top and bottom lines also improved year over year. PepsiCo’s second-quarter core EPS of $2.09 beat the Zacks Consensus Estimate of $1.95 and increased 12.4% year over year. The stock gained 4.3% since reporting earnings in mid-July.
In constant currency, core earnings were up 15% from the year-ago period. Net revenues of $22,322 million improved 10.4% year over year and surpassed the Zacks Consensus Estimate of $21,609 million. Foreign currency impacted revenues by 2.5%.
The company expects organic revenue growth of 10% for 2023 compared with the 8% rise mentioned earlier. It anticipates core constant-currency earnings per share growth of 12% from the year-ago period’s reported figure versus 9% growth stated earlier. Based on the above assumption, PepsiCo expects core earnings per share of $7.47 for 2023 compared with the $7.27 per share mentioned earlier.
PepsiCo has been committed to rewarding shareholders through dividends and share buybacks. It expects to return a value worth $7.7 billion in 2023, including $6.7 billion of dividends. Additionally, the company plans to repurchase shares worth $1.0 billion in 2023.
ETFs in Focus
Against this upbeat backdrop, investors may be interested in knowing about the Coke and PepsiCo-heavy ETFs along with their stocks. This is because an ETF approach always minimizes company-specific risks. Plus, investors can take positions in two soft-drink giants through a single product while they invest in ETFs.
ETFs in Focus
Coca-Cola and PepsiCo each has exposure to funds like iShares U.S. Consumer Staples ETF (IYK - Free Report) , Consumer Staples Select Sector SPDR Fund (XLP - Free Report) , Vanguard Consumer Staples ETF (VDC - Free Report) , First Trust Nasdaq Food & Beverage ETF (FTXG - Free Report) and Fidelity Covington Trust MSCI Consumer Staples Index ETF (FSTA - Free Report) in the range of 8% to 11%.
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Coke, PepsiCo Earnings Should Drive Consumer Staples ETFs
The Zacks Rank #3 (Hold) soft drink bellwether Coca-Cola Company (KO - Free Report) reported earnings on Jul 26 before market open and Zacks Rank #2 (Buy) PepsiCo Inc. (PEP - Free Report) reported results in mid-July. Both companies beat overall and raised view. Let’s delve a little deeper.
Coca-Cola Earnings in Details
The Coca-Cola Company (KO - Free Report) has reported better-than-expected top and bottom-line results for second-quarter 2023. Earnings and sales also improved year over year. The company’s results have benefited from its continued business momentum. KO has raised its view for 2023. Shares rose 1.3% in the key trading season post reporting earnings.
Comparable earnings of 78 cents per share grew 11% from the year-ago period and beat the Zacks Consensus Estimate of 72 cents. However, unfavorable currency translations hurt comparable earnings by 6 percentage points.
Comparable currency-neutral earnings per share rose 17% year over year. Revenues of $11,972 million surpassed the Zacks Consensus Estimate of $11,734 million and improved 6% year over year. Organic revenues rose 11% from the prior-year quarter.
Management anticipates organic revenue growth of 8-9% for 2023 compared with 7-8% growth expected earlier. Comparable currency-neutral earnings per share are estimated to increase 9-11% versus 7-9% growth mentioned earlier. The company anticipates year-over-year comparable earnings per share growth of 5-6% for 2023 compared with 4-5% growth stated earlier.
Its comparable earnings per share growth is likely to include a headwind of 4-5% from currency, and a slight headwind from acquisitions and divestitures. The company previously anticipated a 3-4% currency headwind on comparable earnings per share.
PepsiCo Earnings in Detail
PepsiCo has reported robust second-quarter 2023 results, wherein revenues and earnings surpassed the Zacks Consensus Estimate. The top and bottom lines also improved year over year. PepsiCo’s second-quarter core EPS of $2.09 beat the Zacks Consensus Estimate of $1.95 and increased 12.4% year over year. The stock gained 4.3% since reporting earnings in mid-July.
In constant currency, core earnings were up 15% from the year-ago period. Net revenues of $22,322 million improved 10.4% year over year and surpassed the Zacks Consensus Estimate of $21,609 million. Foreign currency impacted revenues by 2.5%.
The company expects organic revenue growth of 10% for 2023 compared with the 8% rise mentioned earlier. It anticipates core constant-currency earnings per share growth of 12% from the year-ago period’s reported figure versus 9% growth stated earlier. Based on the above assumption, PepsiCo expects core earnings per share of $7.47 for 2023 compared with the $7.27 per share mentioned earlier.
PepsiCo has been committed to rewarding shareholders through dividends and share buybacks. It expects to return a value worth $7.7 billion in 2023, including $6.7 billion of dividends. Additionally, the company plans to repurchase shares worth $1.0 billion in 2023.
ETFs in Focus
Against this upbeat backdrop, investors may be interested in knowing about the Coke and PepsiCo-heavy ETFs along with their stocks. This is because an ETF approach always minimizes company-specific risks. Plus, investors can take positions in two soft-drink giants through a single product while they invest in ETFs.
ETFs in Focus
Coca-Cola and PepsiCo each has exposure to funds like iShares U.S. Consumer Staples ETF (IYK - Free Report) , Consumer Staples Select Sector SPDR Fund (XLP - Free Report) , Vanguard Consumer Staples ETF (VDC - Free Report) , First Trust Nasdaq Food & Beverage ETF (FTXG - Free Report) and Fidelity Covington Trust MSCI Consumer Staples Index ETF (FSTA - Free Report) in the range of 8% to 11%.