Coca-Cola's Sweet Surge: Q2 Earnings Soar, Raises 2024 Forecasts

Coca-Cola Company KO shares are trading higher following better-than-expected second-quarter FY24 earnings and a raised outlook.

The company reported second-quarter FY24 sales growth of 3% year-on-year to $12.4 billion, beating the analyst consensus estimate of $11.753 billion.

Revenue performance included a 6% climb in concentrate sales and a 9% growth in price/mix. Unit case volume grew 2% in the quarter. Organic revenues increased 15%.

Coca-Cola’s organic revenue in Europe, Middle East and Africa jumped 30% in the second quarter, while in North America, it increased 10%.

Gross profit rose 7% to $7.551 billion with a profit margin of 61.1%. The operating margin expanded 120 basis points to 21.3%, while the comparable operating margin gained 120 basis points to 32.8%. 

Operating income for the quarter increased 10% to $2.63 billion. Adjusted EPS of $0.84 beat the consensus estimate of $0.81.

Operating cash flow generated for six months was $4.1 billion, a decrease of $516 million from the prior year. Free cash flow totaled $3.3 billion. KO held $17.39 billion in cash and equivalents as of June 28.

Outlook: Coca-Cola raised its FY24 organic revenue growth outlook from 8% – 9% to 9% – 10%.

KO raised comparable currency neutral EPS growth outlook from 11% – 13% to 13% – 15%.

The company raised comparable EPS (non-GAAP) growth guidance from 4% – 5% to 5% – 6% versus $2.69 in 2023.

Coca-Cola still expects to generate free cash flow (non-GAAP) of approximately $9.2 billion through cash flow from operations of approximately $11.4 billion, less capital expenditures of approximately $2.2 billion.

Price Action: KO shares are trading higher by 1.65% at $65.84 in premarket at the last check Tuesday.

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