Coca-Cola (KO.US) is among companies that released their second-quarter earnings reports before today’s U.S. market open. As an iconic brand and one of the largest enterprises in America, these financial results might to some extent be useful to get an overview of global beverage sector. Bloomberg consensus anticipated that company’s 2Q comparable EPS would amount to 40c (range 33c to 44c). However, Coca-Cola managed to beat these estimates as the firm achieved comparable EPS of 42c. Nevertheless, the coronavirus pandemic has had a significant impact on Coca-Cola’s performance - this should not be a surprise given closed restaurants and bars during the global lockdown not so long ago.
Company’s revenues declined 28% YoY to $7.175 billion (vs estimate: $7.238 billion). Organic revenue fell as much as -26% YoY (estimate: -21,6%) while year-to-date cash from operations was $2.8 billion, down 38%. The company said that its full year results cannot be reasonably estimated. However, management sees 2Q as most severely impacted quarter of the year and ensures that balance sheet remains strong. Still, as the company managed to beat most estimates (apart from 2Q revenues), Coca-Cola’s shares surge over 2% in pre-market trading today.
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The coronavirus pandemic has had a sizeable impact on Coca-Cola’s performance. Still, as the firm managed to beat most estimates, investors tend to bet on this iconic brand. Should bulls gain significant control during today’s trading, the 50% Fibo retracement ($48.15 area) of the February-March drop may be on the cards. Post-pandemic highs ($49.85) might be regarded as crucial resistance level should the rally continue. Source: xStation5
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