Coca-Cola and PepsiCo: Q2 Results Sparkle

Quarterly results were reported this week for two thirst-quenching giants, Coca-Cola and PepsiCo.

Both soft-drink companies reported some "pop" in global sales volumes.

Coca-Cola announced a four percent increase in global sales volumes.

The greatest gains, not surprisingly, were seen in Asia (India: 33%, and China: 14%), where exploding populations, sugar consumption, and sugar sales are hugely impacting the food industry. North American global sales volumes climbed one percent, to boot.

Coca-Cola credits the effervescent earnings per share (up 44% over last year to $0.88) to:

• increased sales volume
• lower commodity costs
• restructuring

In April, the company's new chairman and CEO, Muhtar Kent, told shareholders that, "Coca-Cola is poised to grow in tough economic times, as it did during the Great Depression."

To confirm, the company has a long-term goal of "3-4 percent volume growth and high single digit earnings per share growth this year."

PepsiCo saw a one percent increase in sales volume, despite a three percent decline in net revenue. Gains here were also accredited to international consumption.

Although these same metrics are not as sparkling as Coca-Cola's, PepsiCo's earnings exceeded market expectations, surely sating executives and shareholders alike.

Like Coca-Cola, PepsiCo is also restructuring for growth to boost net revenue and earnings per share for the fiscal year.

Pepsi's new chairman and CEO, Indra Nooyi, said,

"PepsiCo's operating agility and disciplined execution delivered solid results in a difficult year (2008)... We expect '09 will present challenges but we are confident that our robust plans will enable us to navigate through the turbulence and will continue to aggressively grow sustainably and long-term."

Current projects are underway to transform PepsiCo's North American beverage business.

So it would seem that for both companies, plans for growth during the recession are in the can.