We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The low-carb craze among consumers have compelled cola companies to revamp their products and keep their business model sustainable. And the latest Q2 earnings can be described as the fruit of that effort.
Two cola as well as food behemoths — Coca Cola Co. (KO - Free Report) and PepsiCo (PEP - Free Report) — made some progress in Q2 with their better-than-expected results. Let’s delve a little deeper.
Coca-Cola
The Coca-Cola Company delivered a strong second-quarter 2018 with better-than-expected earnings and sales. This marked the fifth straight quarter of an earnings beat while sales topped estimates for the fourth consecutive quarter.
The company’s second-quarter 2018 comparable earnings were 61 cents per share, ahead of the Zacks Consensus Estimate of 60 cents. The bottom line also improved 3% from the year-ago period, driven by ongoing productivity efforts. Currency translation negatively impacted earnings by 2%.
Revenues of $8.9 billion outpaced the Zacks Consensus Estimate of $8.6 billion. However, net revenues declined 8% year over year due to a 15% adverse effect from the refranchising of company-owned bottling operations. This represented the company’s 13th consecutive quarterly decline.
During the quarter, the company has been steadfast in promoting and globalizing its brands, like Coca-Cola Stevia No Sugar and dairy-free smoothie brand AdeZ. It also brought its refurbished Diet Coke campaign to Britain, after its launch in the United States, per an article published on CNBC. The stock gained more than 1.8% in the key trading session on Jul 25.
PepsiCo
PepsiCo reported second-quarter 2018 results on Jul 10 before market open and gave its shares an about 4.8% lift in the key trading session. Earnings topped estimates thanks to solid Frito-Lay snacks growth, which made up for the struggling North America Beverages segment (read: PepsiCo Q2 Earnings Aid Staples ETFs, Are Gains Transitory?).
Core earnings per share (EPS) of $1.61 beat the consensus mark of $1.51 per share by 6.6% and increased 8% year over year. Notably, this marked the ninth consecutive quarter of positive earnings surprise. Investors should note that the earnings outperformance came despite rising trucking and commodity costs (read: Will Consumer ETFs Lose Momentum on Trump Tariffs?).
Net revenues of $16,090 million increased 2.4% from the year-ago level. Foreign exchange (Fx) had one percentage point positive impact on revenue growth. However, reported revenues lagged the Zacks Consensus Estimate of $16,125 million.
ETF Impact
The consumer staples ETFs having notable exposure to Coke and PepsiCo and benefited from their earnings (see all Consumer Staples ETFs here).
Consumer Staples Select Sector SPDR Fund (XLP - Free Report)
Of its 32 holdings, the in-focus Coca-Cola takes the second spot, making up roughly 10.73% of the assets, while PepsiCo accounts for about 10.07% of XLP taking up the third position. The fund added 0.6% on Jul 25.
Coca-Cola is the second company with 9.7% allocation, while PepsiCo takes the third position holding 8.4%. The fund added about 0.9% on Jul 25 (see all the Consumer Staples ETFs here).
The fund holds about 107 stocks in its basket. Coca-Cola and PepsiCo occupy the second and third positions, respectively, in the basket with 8.25% and 7.63% of assets. The fund advanced about 0.2% on Jul 25.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Cola Earnings Add Fizz to Consumer Staples ETFs
The low-carb craze among consumers have compelled cola companies to revamp their products and keep their business model sustainable. And the latest Q2 earnings can be described as the fruit of that effort.
Two cola as well as food behemoths — Coca Cola Co. (KO - Free Report) and PepsiCo (PEP - Free Report) — made some progress in Q2 with their better-than-expected results. Let’s delve a little deeper.
Coca-Cola
The Coca-Cola Company delivered a strong second-quarter 2018 with better-than-expected earnings and sales. This marked the fifth straight quarter of an earnings beat while sales topped estimates for the fourth consecutive quarter.
The company’s second-quarter 2018 comparable earnings were 61 cents per share, ahead of the Zacks Consensus Estimate of 60 cents. The bottom line also improved 3% from the year-ago period, driven by ongoing productivity efforts. Currency translation negatively impacted earnings by 2%.
Revenues of $8.9 billion outpaced the Zacks Consensus Estimate of $8.6 billion. However, net revenues declined 8% year over year due to a 15% adverse effect from the refranchising of company-owned bottling operations. This represented the company’s 13th consecutive quarterly decline.
During the quarter, the company has been steadfast in promoting and globalizing its brands, like Coca-Cola Stevia No Sugar and dairy-free smoothie brand AdeZ. It also brought its refurbished Diet Coke campaign to Britain, after its launch in the United States, per an article published on CNBC. The stock gained more than 1.8% in the key trading session on Jul 25.
PepsiCo
PepsiCo reported second-quarter 2018 results on Jul 10 before market open and gave its shares an about 4.8% lift in the key trading session. Earnings topped estimates thanks to solid Frito-Lay snacks growth, which made up for the struggling North America Beverages segment (read: PepsiCo Q2 Earnings Aid Staples ETFs, Are Gains Transitory?).
Core earnings per share (EPS) of $1.61 beat the consensus mark of $1.51 per share by 6.6% and increased 8% year over year. Notably, this marked the ninth consecutive quarter of positive earnings surprise. Investors should note that the earnings outperformance came despite rising trucking and commodity costs (read: Will Consumer ETFs Lose Momentum on Trump Tariffs?).
Net revenues of $16,090 million increased 2.4% from the year-ago level. Foreign exchange (Fx) had one percentage point positive impact on revenue growth. However, reported revenues lagged the Zacks Consensus Estimate of $16,125 million.
ETF Impact
The consumer staples ETFs having notable exposure to Coke and PepsiCo and benefited from their earnings (see all Consumer Staples ETFs here).
Consumer Staples Select Sector SPDR Fund (XLP - Free Report)
Of its 32 holdings, the in-focus Coca-Cola takes the second spot, making up roughly 10.73% of the assets, while PepsiCo accounts for about 10.07% of XLP taking up the third position. The fund added 0.6% on Jul 25.
Vanguard Consumer Staples ETF VDC)
Coca-Cola is the second company with 9.7% allocation, while PepsiCo takes the third position holding 8.4%. The fund added about 0.9% on Jul 25 (see all the Consumer Staples ETFs here).
iShares U.S. Consumer Goods ETF (IYK - Free Report)
The fund holds about 107 stocks in its basket. Coca-Cola and PepsiCo occupy the second and third positions, respectively, in the basket with 8.25% and 7.63% of assets. The fund advanced about 0.2% on Jul 25.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>