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Earlier this week, Coca-Cola reported impressive second quarter results. Investors probably didn’t realize just how impressive those results were until Pepsi reported their own numbers today.
Net revenues grew 47 percent at Coca-Cola in the second quarter and EPS came in a penny ahead of Wall Street’s estimates. That sent KO’s stock price up over 3 percent to a new 52-week high following the earnings report.
Muhtar Kent, Chairman and CEO of The Coca-Cola Company, commented, "We are delivering these strong results at a time when global macroeconomic conditions are at best mixed."
This morning Pepsi reported their second quarter numbers and the results weren’t nearly as impressive. Revenues climbed 14 percent and EPS came in right at the consensus level. However, Pepsi lowered their 2011 earnings forecast citing higher commodity costs and a weak consumer environment. That sent PEP stock plunging 3.4 percent.
PepsiCo Chairman and CEO Indra Nooyi commented on the second quarter results:

While we are satisfied with the performance of our portfolio overall, the consumer in developed markets continues to be stressed, and the competitive environment in North America beverages has been particularly challenging.

Perhaps most interesting is a comparison of the two beverage company’s North American results.
Coca-cola reported beverage volumes grew 1 percent in North America during the quarter. By contrast, Pepsi beverage volumes declined by 1 percent! Suddenly Coke is looking like the real thing as the value of their brand is strong even in a weak economic environment.
Pepsi may appear to trade at a more compelling valuation that Coca-Cola. They’re currently valued at 13.5x their 2012 earnings, while KO is trading at 16x future earnings. Pepsi even offers a bigger dividend yield than Coca-Cola right now (3.0% vs. 2.6%). However, the fundamentals of a stock speak even louder than valuation metrics. Those fundamentals indicate that Coca-Cola is positioned to better weather rising commodity costs and consumer headwinds than Pepsi is.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: Coca-Cola Just Keeps Looking Better