The Coca-Cola Co. (KO) stock is dropping slightly to $45.01 a share in pre-market trading, despite a solid earnings beat as net sales fell 16% from the prior year.
Before Wednesday's market open, the beverage giant reported second-quarter earnings of 59 cents a share on revenue of $9.7 billion, compared to Wall Street's estimates for earnings of 57 cents a share on revenue of $9.7 billion.
Coca-Cola said in the earnings release that its revenue was negatively impacted by its ongoing effort to refranchise its bottling operations, which is close to being completed in the U.S.
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The company said that it saw "strong performance" and growth from its juice and smoothie business in Europe and lower-calorie options like Coca-Cola Zero Sugar. Coca-Cola has been under pressure from the increasing consumer shift to healthier eating options. Earlier this month, SodaStream Int.'l Ltd (SODA) , the manufacturer and distributor of at-home beverage carbonation systems, attacked both Coca-Cola and rival PepsiCo Inc. (PEP) in a new ad for their "prehistoric" practices of not only relying on carbonated, sugary drinks but for using plastic bottles, which are harmful to the environment.
"As we pass the mid point of the year, we are pleased to say we are where we expected to be," Coca-Cola CEO and President James Quincey said on a company earnings call with analysts.
Quincey, previously serving as the chief operating officer, took over as CEO when Muhtar Kent stepped down in May. He has been driving an effort to take Coca-Cola away from its core soda business and transform it to a "total beverage company."
On the call, Quincey said Coca-Cola will work on "expanding recipes" within its lower-calorie beverage options.
PepsiCo, backed by snacks segment Frito-Lay North America, has begun shifting away from its calorie-laden soda business, citing the recent "profound" changes the beverage industry has seen. The company managed to deliver a sweet earnings beat for its own second quarter.
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