Coca-Cola second quarter earnings top estimates, raises full-year guidance

The Coca-Cola Company (NYSE:KO) reported better-than-expected second quarter results on Tuesday and raised its full-year guidance, sending shares up almost 7% in early trading on Tuesday.

The beverage maker posted adjusted earnings of $0.97 per share for the quarter, ahead of Wall Street estimates of $0.93 per share.

Revenue rose 7% year over year to $13.38 billion, topping analysts' expectations of $13.13 billion.

Organic revenue, which excludes the impact of acquisitions, divestitures and currency movements, rose 6%, supported by a 4% increase in concentrate sales and 2% growth in price/mix. Net revenue reached approximately $13.4 billion.

Global unit case volume grew 5%, driven by growth in India, China, the United States and Brazil. Trademark Coca-Cola volume increased 5%, while Coca-Cola Zero Sugar volumes rose 16%. Sparkling soft drink volumes grew 4%, and water, sports, coffee and tea volumes increased 6%.

Alongside the results, Coca-Cola raised its full-year 2026 outlook, now expecting organic revenue growth of approximately 5%, up from its previous forecast of 4% to 5%.

The company also lifted its comparable currency-neutral EPS growth outlook excluding acquisitions and divestitures to 7% to 8%, compared with its prior expectation of 6% to 7%.

Coca-Cola now expects comparable EPS growth of 9% to 10% for the year, including an estimated 3% currency tailwind and a roughly 1% headwind from acquisitions and divestitures, compared with its previous forecast of 8% to 9% growth. The company maintained its underlying effective tax rate outlook at 19.9%.

The company also increased its free cash flow outlook to approximately $12.4 billion, up from its prior forecast of $12.2 billion, reflecting expectations for about $14.6 billion in cash flow from operations and $2.2 billion in capital expenditures.

"We delivered another strong quarter by staying close to the changing needs of our consumers and customers," Coca-Cola CEO Henrique Braun said in a statement.

"While we continue to see a dynamic consumer landscape, we leveraged our powerful brands and system to gain value share, delivering revenue, profit and earnings growth while also investing for the long term."

Jefferies highlighted the strength of the quarter, noting Coca-Cola delivered an organic revenue growth result well above expectations and exceeded earnings estimates.

The analysts wrote that despite concerns around the stock being a crowded trade, they do not view that as a major issue, particularly following another quarter of better-than-expected results and raised guidance.

Jefferies added that Coca-Cola's valuation does not fully reflect its volume-driven organic growth, improving return on invested capital profile and potential benefits to free cash flow from a favorable IRS tax outcome. The firm maintained its 'Buy' rating.