Why Coca-Cola Stock Jumped 6% Today
Key Points
Coca-Cola's Q1 revenue rose 12% year over year to $12.47 billion, beating analyst estimates.
Sales and shipping volumes grew in every geographic region.
The stock is nearly back to all-time highs after today's surge.
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Shares of Coca-Cola (NYSE: KO) were up by 6.2% at 12:40 p.m. ET. The beverage giant reported first-quarter results early Tuesday morning, landing just ahead of Wall Street's consensus estimates across the board.
Coca-Cola's Q1 by the numbers
Coke's net revenues rose 12% year over year to $12.47 billion. Adjusted earnings jumped from $0.73 to $0.86 per diluted share, which works out to an 18% increase. The average analyst would have settled for earnings near $0.81 per share on top-line sales in the neighborhood of $12.27 billion.
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Sales and shipping volumes were up across all geographic regions. Operating profits also rose everywhere, except for a 17% drop in the Asia Pacific region. The company ran extensive discount programs in this region, while ingredient costs surged. That's a minor setback in a broadly successful quarter, though.
Image source: Getty Images.
Why investors are raising a glass
Coke is still growing even after a long stretch of strong results. The stock is nearly back to all-time highs after today's surge, making up for macroeconomic concerns and weak consumer confidence in recent months.
It's a global giant with a diverse beverage portfolio, unbeatable brand power, and a lean business model. Bottling partners handle the hard, expensive work of product distribution, while Coca-Cola largely develops the right flavors and marketing materials for each market.
Management raised its full-year earnings guidance to 8% to 9% growth, up from 7% to 8% previously. That's the kind of "underpromise, overdeliver" energy Coke investors love to see.
Twenty straight quarters of value share gains don't hurt either. The company is consistently outpacing rivals in revenue generation, not shipping more cans at a cut-rate price.
Again, the Asia Pacific situation is an exception to Coke's positive trends, but that should be a temporary issue. On the earnings call, CFO John Murphy pinned it on a sudden spike in juice inventory costs for beverage concentrate production in China.
For a 138-year-old company, Coke still knows how to look fresh on Wall Street.
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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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