What was the primary driver of revenue growth in the reported period?

Revenue growth was primarily driven by a favorable combination of pricing initiatives and a positive price, product, and geographic mix. Volume growth also contributed, though it was more modest.

What led to the decrease in operating income for the first six months of the year?

The decrease in operating income for the first six months was largely due to significant 'Other Operating Charges' recorded in the prior year's comparable period. These charges included the remeasurement of contingent consideration for the fairlife acquisition and an impairment of the BodyArmor trademark. While the current period saw revenue growth, the prior year's unusually low operating expenses in certain areas impacted the year-over-year comparison.

What is the status and potential impact of the IRS transfer pricing dispute?

The IRS transfer pricing dispute for tax years 2007-2009 continues. While Coca-Cola believes its positions will be sustained on appeal, the Tax Court has largely sided with the IRS. The company has updated its tax reserve to $456 million as of June 28, 2024. However, the potential aggregate incremental tax and interest liability, if the IRS's methodology is applied to subsequent years, could be significant, estimated at approximately $16 billion as of December 31, 2023. A payment of around $6.0 billion related to the 2007-2009 tax years is anticipated by the end of 2024, subject to appeals.

How did currency fluctuations affect the company's financial performance?

Foreign currency exchange rate fluctuations had an unfavorable impact on net operating revenues and operating income. A stronger U.S. dollar against various foreign currencies negatively affected results, particularly in Latin America and Europe, Middle East, and Africa. The company expects this unfavorable impact to continue through the end of the year.

KO 10-Q Quarterly Report Q2 FY2024 — Revenue, Net Income, EPS

Summary

Coca-Cola Company (KO) reported its second quarter and first half fiscal year 2024 results, showcasing continued revenue growth driven by strong pricing initiatives and a positive mix of products and geographies, alongside a slight increase in unit case volume. For the three months ending June 28, 2024, net operating revenues increased by 3% to $12.4 billion, while for the six months, revenues grew 3% to $23.7 billion. Despite a challenging macroeconomic environment and unfavorable foreign currency impacts, the company demonstrated resilience. Operating income for the quarter increased by 10% to $2.6 billion, though it saw a 17% decrease for the first half to $4.8 billion, largely due to significant "Other Operating Charges" related to the fairlife contingent consideration remeasurement and the BodyArmor trademark impairment in the prior period. Diluted earnings per share for the quarter were $0.56, compared to $0.59 in the prior year. The company maintained a strong balance sheet with substantial cash and cash equivalents, and continued to return value to shareholders through dividends and share repurchases.

Financial Highlights

52 data points

Beta

Revenue

$12.36B

0.6% Gross Margin

Net Income

$2.41B

0.2% Net Margin

EPS (Diluted)

$0.56

Total Assets

$101.20B

Cash & Equivalents

$13.71B

Free Cash Flow

$3.16B

Financial Statements

Beta

Revenue	$12.36B
Cost of Revenue	$4.81B
Gross Profit	$7.55B
SG&A Expenses	$3.55B
Operating Income	$2.63B
Interest Expense	$418.00M
Net Income	$2.41B
EPS (Basic)	$0.56
EPS (Diluted)	$0.56
Shares Outstanding (Basic)	4.31B
Shares Outstanding (Diluted)	4.32B

Key Highlights

1Net operating revenues increased 3% to $12.4 billion for the three months ended June 28, 2024, and 3% to $23.7 billion for the six months ended June 28, 2024, driven by pricing and favorable mix.
2Operating income for the three months increased 10% to $2.6 billion, reflecting strong revenue growth and pricing initiatives.
3However, operating income for the six months decreased 17% to $4.8 billion, primarily impacted by significant 'Other Operating Charges' in the prior year period related to fairlife contingent consideration and BodyArmor trademark impairment.
4Gross profit margin improved to 61.1% for the quarter and 61.8% for the first half, up from 59.0% and 59.8% respectively, driven by pricing and bottling refranchising, partially offset by commodity costs and currency fluctuations.
5Diluted earnings per share for the quarter were $0.56, a slight decrease from $0.59 in the prior year period.
6The company maintained a strong liquidity position with $13.7 billion in cash and cash equivalents as of June 28, 2024.
7Significant legal proceedings related to IRS transfer pricing continue, with an estimated potential aggregate incremental tax and interest liability of approximately $16 billion as of December 31, 2023. The company estimates a payment of approximately $6.0 billion related to the 2007-2009 tax years could be made by the end of 2024.

COCA COLA CO Quarterly Report for Q2 Ended Jun 28, 2024

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions