The Prince George Citizen

Coke shares bubble up to record high

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Coca-Cola shares hit a record high after the company upped its full-year revenue expectatio­ns and said it’s winning customers with new drinks like low-sugar sodas and iced coffees.

Shares of Coca-Cola Co. rose six per cent to close at $54.33 Tuesday. Coke’s shares first rose above $50 in early June.

Chairman and CEO James Quincey said product innovation is helping the company gain global market share. New and reformulat­ed products – like Coca-Cola Plus Coffee and lower-calorie Simply juices – now account for 25 per cent of the company’s revenue, up from 15 per cent two years ago, Quincey said.

The world’s largest drink company also sees plenty of room for growth. Quincey said 80 per cent of the world’s population lives in developing markets like Africa, India and China, where commercial beverages make up just onequarter of drink consumptio­n. In developed markets, commercial beverages account for three-quarters of consumptio­n.

“That’s a huge opportunit­y in front of us,” Quincey said. “We’re seeing good growth this quarter and have been seeing it for a while.”

Coke posted second quarter earnings of $2.61 billion, or 61 cents. Earnings, adjusted for one-time gains and costs, came to 63 cents per share, which is a penny better than expected, according to analysts surveyed by Zacks Investment Research. Revenue was $10 billion, also beating expectatio­ns.

The Atlanta company projected organic revenue growth of five per cent for the year. That’s equal to its growth in 2018 and better than the four per cent organic revenue growth the company initially forecast in January.

Coke said its first energy drink, Coca-Cola Energy, launched in Europe during the quarter and saw some sales success.

The company plans to expand sales of the new product to 20 markets by the end of this year.

Quincey said the company hasn’t yet said when the drink will come to the U.S.

Coke’s acquisitio­n of British coffee shop chain Costa Coffee – which was completed earlier this year – is also paying off. New drinks like Coca-Cola Plus Coffee and chilled, lowsugar Costa Coffee beverages saw growth in the April-June period.

Soft drink sales rose three per cent in the quarter, thanks to double-digit growth of Coca-Cola Zero Sugar and new products like Coca-Cola Orange Vanilla.

Coke recorded some softness in older products like Dasani bottled water and Minute Maid juices. But in those cases, higher sales of premium products like Smartwater and Simply juices made up for some of the shortfall.

Overall volume was up in every market but North America, where it fell one per cent. Quincey said a transition to smaller can sizes – which command higher prices – is one reason for the decline. Pricing rose up four per cent in the region.

 ?? BLOOMBERG PHOTO ?? A Coca Cola trailer sits in a parking lot on March 12 in Salt Lake City, Utah.
BLOOMBERG PHOTO A Coca Cola trailer sits in a parking lot on March 12 in Salt Lake City, Utah.

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