Is Buffett's Beverage Giant Still a Sweet Investment? Coca-Cola Beats Estimates and Deems Tariffs "Manageable"

Core Viewpoint - Coca-Cola's Q1 results indicate that the company is largely unaffected by the current trade war, projecting manageable impacts on its business operations [1][6]. Financial Performance - Coca-Cola reported net revenue of $11.1 billion for Q1, a decrease of 2% year-over-year, while global case unit volume rose by the same percentage [2]. - The company's adjusted net earnings increased by 1% to $0.73 per share, aligning closely with analyst estimates [2][3]. - The company anticipates a currency headwind of 2% to 3% on net revenue, an improvement from previous guidance of 3% to 4% [9]. Regional Performance - Unit case volume grew by 3% in the EMEA region and 6% in the Asia Pacific, while Latin America remained flat and North America saw a 3% decline [4]. Trade War Impact - Coca-Cola's management expressed confidence in managing the effects of tariffs, noting that their operations primarily source inputs locally [6][7]. - CEO James Quincey highlighted that the company's exposure to tariff-related costs is minimal compared to its overall operations [7]. Future Guidance - The company maintained its forecasts for adjusted earnings-per-share growth of 2% to 3% over the $2.88 of 2024 and projected adjusted cash flow of approximately $9.5 billion [8]. - Coca-Cola's dividend was raised by 5%, reflecting its strong cash flow and consistent dividend history, with a current yield of 2.8% [12]. Investment Appeal - Given its limited exposure to trade disruptions and attractive dividend growth, Coca-Cola is viewed as a favorable investment during the ongoing trade war [13][14].