Coca-Cola Stock Dips as Pricing Pressure Offsets Q2 Earnings Beat

July 22 - Shares of Coca-Cola KO dipped more than 1% Tuesday morning despite the company posted better-than-expected second-quarter earnings, fueled by stronger pricing and resilient demand for its zero-calorie sodas.

Revenue for the quarter rose 2.5% year over year to $12.62 billion, topping LSEG estimates of $12.54 billion. Higher prices helped offset a 1% decline in global beverage volumes, with North America seeing weakness tied to consumer pressure in lower-income groups.

Volumes slipped in key regions including India, Mexico and the U.S., partly due to a now-resolved boycott by Hispanic consumers. CEO James Quincey noted that economic uncertainty and pricing sensitivity weighed on sales in some markets.

Coca-Cola added it anticipates its annual comparable EPS to fall in the range of the upper limit of its historical goal of 2 percent to 3 percent growth with help of a weaker U.S. dollar.

There is also an expansion strategy of the company to introduce an American version of its Coke in cane sugar in some of the markets where it is already marketed, such as in Mexico. The step comes as part of a wider trend of the industry moving to lighter ingredients, though analysts warned it will increase expenses and increase supply chain complexity.

The Coca-Cola also stated that it is remaining pessimistic on the expenses due to world trade dynamics. The company is still trying to look into cheaper packaging following a sharp increase in tariffs in the United States on foreign supply of imported aluminum which increased by 50%.