Coca-Cola shares sink after not reaching quarterly income expectations

• Coca-Cola disappoints with a low growth quarter and a great drop in cash flow.
• Ko’s shares fall after the second quarter revenues are weak.
• The Executive Directorate awaits winds against in the third quarter due to the weakness of the US dollar.
• The market seems to be waiting for the profit and Alphabet profit results on Wednesday.

Coca-Cola (KO) About 1% fell after the publication of the results of the second quarter on Tuesday morning, being a pillar of many dividend portfolios and a component in the three main stock market indices of the US Street.

The Dow Jones industrial average (DJIA) is the only important US stock index in Tuesday, clinging to a 0.1%gain, while NASDAQ and S&P 500 have lost 0.5%and 0.2%, respectively, at the time of writing.

After the S&P 500 fell from a new historical maximum on Monday, the market prepares for bad news while waiting for the results of high profile of high profile of Tesla (Tsla) and Alphabet (Googl) on Wednesday.

Coca-Cola Profit News

Coca-Cola won $ 0.87 per share in the second quarter, being 3 cents above the projections and the quarter of the previous year. However, taking into account inflation, the gains of the quarter were practically flat.

The worst thing was that the revenues in the second quarter were 12.5 billion dollars, which were 80 million dollars below the consensus and increased less than 1% compared to the previous year.

The income continued to fall in Latin America and in the company’s bottling investments, but the income increased in low digits in North America, Emea and Asia. The adjusted operational margin comparable in the second quarter was quite good, with 34.7%, the highest level in more than three years. However, the company saw a negative free cash flow of $ 2,100 million in the second quarter. This was a drastic drop of 5,000 million dollars compared to the previous year.

The volume of global units fell by 1% compared to the previous year. The main product of Coca-Cola saw a drop in income of 1% year-on-year, but Coca-Cola Zero Sugar increased its sales by 14% in that period.

Executives said they would follow the example of President Donald Trump by introducing a version of Coca-Cola with cane sugar for US customers, who are accustomed mainly to the product based on corn syrup.

For the third quarter, which ends in September, Coca-Cola estimates that it will face a wind against 5% -6% due to changes in exchange rates. This is largely due to the loss of value of the US dollar compared to many foreign currencies.

Forecast of Coca-Cola Shares

It is quite impressive how much Volatility lacks Coca-Cola’s action. The company has a 0.45 beta, according to its five -year monthly graph. This means that KO’s shares move less than half than the market. If the market rises by 1% in general, then KO, on average, moves only 0.45%.

Also, since mid-February, Coca-Cola has been operating between $ 66 and $ 74. And during most of the last six months, KO has only operated within a narrow range of $ 69 and $ 72. Even Tuesday’s price dynamics was spitting from simple mobile socks (SMA) of 50 and 200 days.

This gives KO a large resistance band between $ 72 and $ 74, as well as a large support band between $ 66 and $ 69. It is not surprising that KO has a relative force index (RSI) of 45, since it shows little impulse. The operators will be attentive to a downward rupture of $ 66 or a rpture of $ 74 for more clues.

Daily Coca-Cola Shares Graph