Why Coca-Cola Shares Are Ticking Higher Today

Coca-Cola Co KO reported second-quarter FY23 sales growth of 6% year-on-year to $11.97 billion, beating the consensus of $10.56 billion.

Revenue performance included a 1% growth in concentrate sales and a 10% growth in price/mix.

Unit case volume was even for the quarter.

Gross profit rose 9% to $7.06 billion with a profit margin of 58.9%.

The operating margin contracted 60 basis points to 20.1%, while the comparable operating margin gained 90 basis points to 31.6%. 

Operating income for the quarter increased 3% to $2.4 billion.

Adjusted EPS of $0.78 beat the analyst consensus of $0.65.

Operating cash flow generated year-to-date was $4.6 billion, a 2% increase Y/Y.

KO held $15.7 billion in cash and equivalents as of June 30, 2023.

Outlook: Coca-Cola raises FY23 organic revenue growth outlook from 7%-8% to 8% - 9%.

KO sees comparable currency neutral EPS growth of 9%-11% (prior 7%-9%) and comparable EPS growth of 5%-6% (prior 4%-5%) versus $2.48 in 2022.

Coca-Cola expects FY23 free cash flow of about $9.5 billion and $11.4 billion in cash flow from operations.

Price Action: KO shares are trading higher by 1.25% at $63.03 in premarket on the last check Wednesday.