Coca-Cola (KO) slashed its outlook for the year, while its soft-drink peer Dr Pepper Snapple (DPS) did quite the opposite and gave full-year earnings guidance a boost.
Coca-Cola reported an adjusted 60 cents in per-share earnings, down 5% from the prior year's Q2 but 2 cents above views.
However, a 5% revenue decline to $11.52 billion was worse than expected, with CEO Muhtar Kent citing in a statement "challenging macroeconomic conditions, structural changes and foreign-exchange headwinds" as weighing on the quarter, as well as "difficult external conditions" in emerging markets. Analysts had projected $11.64 billion.
That marks the fifth straight quarter of year-over-year earnings and revenue declines for Coca-Cola.
Global unit case volume was flat for the quarter.
Coca-Cola now expects a 4%-7% EPS decline and 3% in organic revenue growth in 2016, down from prior guidance for 4%-6% EPS growth and 4%-5% in organic revenue gains. Organic revenue excludes currency shifts. Wall Street sees a a 3% EPS decline and 4% revenue dip for the year.
Shares closed down 3.3% to 43.40 on the stock market today, tumbling through the 200-day moving average. Coca-Cola hasn't closed below that support line since Oct. 2, 2015.
IBD'S TAKE: The Beverages-Non-Alcoholic group ranks 136 out of 197 of IBD's industry groups. Coca-Cola has only earned a 39 Composite Rating. A non-boozy beverage stock that is currently in buy territory and boasts an 89 Composite Rating, however, is Monster Beverage. The New America takes a detailed look at the energy drink maker.
"(Coca-Cola) delivered a solid Q2 above our expectations despite flat volume growth, as it was able to leverage solid performance in developed markets and positive pricing, together with ongoing productivity initiatives to deliver bottom-line results," wrote Wells Fargo analyst Bonnie Herzog.
"While we are disappointed with the outlook, we continue to believe that the outlook for fiscal 2017 and beyond will improve with KO's revised business model once refranchising is complete," Herzog said.
Dr Pepper Snapple
Meanwhile, Dr Pepper Snapple earned $1.25 in adjusted Q2 per-share profit, up 11%, coming in a nickel above estimates. Revenue grew over 2% to $1.7 billion, topping expectations for $1.68 billion.
The beverage maker now sees $4.27-$4.35 in adjusted per-share profit, up from prior guidance for $4.20-$4.30 EPS and vs. current consensus for $4.35.
Shares of Dr Pepper fell 1% to 96.20, dropping just below a recent 95.97 buy point.
