Coca-Cola Set to Announce Q2 Earnings Amid Inflation Concerns
Coca-Cola, the iconic beverage maker, is expected to release its second-quarter earnings on Wednesday morning. With the company's main rival reporting healthy earnings this month, analysts on Wall Street are optimistic about Coca-Cola's performance. However, the impact of inflation on consumer demand remains uncertain.
According to FactSet, analysts predict that Coca-Cola will report earnings of 72 cents per share from revenue of $11.7 billion for the second quarter. This would represent an increase from the previous year's second-quarter earnings of 70 cents per share and revenue of $11.3 billion.
In a recent research note, Evercore ISI analyst Robert Ottenstein expressed confidence in Coca-Cola's momentum based on several positive indicators. He cited PepsiCo's robust second-quarter performance as a promising sign for Coca-Cola. Despite recording strong earnings, PepsiCo also experienced declines in sales volumes, suggesting that previous price increases to offset higher costs have impacted consumer demand.
On PepsiCo's second-quarter earnings call, Chief Executive Ramon Laguarta noted that while some lower-income consumers are strategically optimizing their budgets, the majority of consumers continue to stay loyal to the company's brands and categories.
During its first quarter, Coca-Cola saw an 11% increase in average selling prices. The key question now is whether consumers are willing and able to continue paying higher prices for Coca-Cola and its range of beverages.
Coca-Cola's stock closed slightly lower at $62.24 on Tuesday, representing a 2.1% decline for the year.
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