ATLANTA: Coca-Cola Co exceeded Wall Street estimates for quarterly sales and profit on Wednesday as more consumers reached out for its Zero Sugar brand and the new version of Diet Coke.
Coke and its smaller rival PepsiCo Inc have been focusing on healthier drinks to garner market share as health-conscious consumers shift away from sugary sodas.
Coca-Cola had earlier this year launched new flavors of its popular Diet Coke brand in slimmer packaging and debuted Coca-Cola Stevia No Sugar in New Zealand and dairy-free smoothie AdeZ in Europe in the quarter.
Organic revenue, or sales from its core beverage business, rose 5% in the quarter, with Diet Coke, Coke Zero, and sparkling water contributing the most.
Volumes, a key indicator of demand, grew 2% in the quarter on strong performance of its trademark Coca-Cola brand, as wellas Fuze Tea.
Organic sales in Europe rose 7% after the company reformulated its recipe for a few sodas in response to the UK’s tax on sugar.
“We were impressed with Coca-Cola’s ability to deliver a strong and balanced top line,” Wells Fargo analyst Bonnie Herzog wrote in a note.
Sales in North America, its primary revenue-generating region, rose 7% to US$3.12 billion (RM12.62 billion), but missed analysts’ average estimate of US$3.14 billion (RM12.7 billion), mainly due to a drop in demand for juices and plant-based beverages.
Net income attributable to the company’s shareholders rose to US$2.32 billion (RM9.38 billion), or 54 cents (RM2.18) per share, in the second quarter that ended on June 29, from US$1.37 billion (RM5.54 billion), or 32 cents (RM1.29) per share, a year earlier.
Excluding one-time items, Coca-Cola said it earned 61 cents (RM2.47) per share, beating analysts’ average estimate by a cent (RM0.04), according to Thomson Reuters I/B/E/S.
Revenue fell 8% to US$8.93 billion (RM36.12 billion), hurt by the divestiture of its low-margin bottling operations. Analysts had estimated sales of US$8.54 billion (RM34.54 billion).
Coca-Cola reaffirmed its 2018 profit outlook and said it expects full-year organic revenue to be at least 4%.
Shares of the Atlanta-based company were marginally up at US$45.50 (RM184.02) during pre-market hours.