More than 40 years after Coca-Cola (NYSE:KO) suggested that the world should “Have a Coke and a Smile,” its latest results have investors grinning. KO stock has gained more than 3% in the last three months as lockdowns are lifted in its key markets.
Sales beat expectations in the second quarter, and the drink maker hiked its revenue forecast for the year as business has come roaring back from pandemic-related restrictions that destroyed sales in 2020.
“Our results in the second quarter show how our business is rebounding faster than the overall economic recovery, led by our accelerated transformation,” CEO James Quincey said in the statement. “As a result, we are encouraged and, despite the asynchronous nature of the recovery, we are raising our full year guidance,” he added.
KO Stock Investors Have Lots to Smile About
Coke is seeing a significant rebound in “away-from-home channels” as restrictions eased in certain markets, leading to second-quarter revenues ahead of the 2019 level. What else has investors smiling?
- Year-to-date (YTD) cash flow from operations was $5.5 billion, which is an increase of $2.7 billion over the year before. The increase was “driven by strong business performance, five additional days in the first quarter and working capital initiatives.” YTD cash flow (non-GAAP) was $5.1 billion, an increase of $2.8 billion versus the year prior, driven primarily “by cash flow from operations along with lower capital expenditures versus the prior year.”
- Coca-Cola “gained value share in total nonalcoholic ready-to-drink (NARTD) beverages driven by a share gain in both at-home and away-from-home channels.” That value share is now ahead of the 2019 level.
- For full year 2021, KO expects to deliver organic revenue growth of 12% to 14%.
- Management now expects to see comparable earnings per share (non-GAAP) growth of 13% to 15%. That’s versus $1.95 in 2020.
- Coca-Cola “expects to generate free cash flow (non-GAAP) of at least $9 billion through cash flow from operations of at least $10.5 billion less capital expenditures of approximately $1.5 billion.”
And in case you’re feeling nostalgic, have a look at this 1979 commercial.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News and as a buyside equity research editor. His Substack newsletter, TLV Strategist, covers the Israel business scene.