The Coca-Cola Co. (NYSE: KO) reported second-quarter results this morning, posting EPS of $1.21 on revenue of $13.1 billion. Net earnings were slightly lower compared with last year: $2.79 billion versus $2.8 billion a year ago. The consensus estimate called for EPS of $1.19 on revenue of $12.98 billion.
The company increased its worldwide sales of carbonated beverages by 3% and its sales of noncarbonated drinks by 9%. Cost of goods rose 5% in the quarter, but currency exchange rates reduced those costs by 3%. Commodity prices were “moderately higher” than in the second quarter of 2011.
As the dollar gains strength against most other currencies, Coke expects to feel a significant impact:
Including our hedge positions, current spot rates and the cycling of our prior year rates, we estimate the unfavorable currency impact on full-year 2012 operating income to be at the high end of a mid single-digit range, and the unfavorable currency impact on operating income in the third quarter is anticipated to be 8% to 9%.
But the good news for investors in the quarter was the impact of the company’s share buyback. Coke repurchased $1.6 billion in common stock. The company plans to complete its two-for-one stock split on July 27th as well.
The company is also exposed to higher commodity prices going forward as the U.S. drought pushes up corn prices. Coke uses corn syrup sweetening for many of its drinks, and corn prices are at a 10-month high right now and still climbing.
Shares of Coca-Cola are up about 1.3% in pre-market, trading at $77.44 in a 52-week range of $64.34 to $79.36.
Paul Ausick
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.