Raphael Stevens

Coke reported higher revenue that topped analysts’ expectations on higher pricing and an increase in global sales volume.
Coke and its rival PepsiCo are both facing higher costs for key goods, like aluminum.

A woman is drinking Coca-Cola near Playacar Beach in Playa del Carmen, Mexico.
Artur Widak | NurPhoto | Getty Images

Coca-Cola on Tuesday reported quarterly earnings that topped expectations as the beverage giant’s sales at restaurants, theaters and other venues recovered from the pandemic.
Here’s what the company reported, versus what Wall Street analysts surveyed by Refinitiv expected:

Adjusted earnings per share: 70 cents, versus 67 cents expected
Adjusted revenue: $11.3 billion versus $10.56 billion expected

The Atlanta-based maker of Sprite, Dasani and Minute Maid said it now expects organic revenue growth of 12% to 13% for the full year, up from its previous guidance for growth of 7% to 8%. But it noted that commodity price inflation is expected to be higher than previously forecast, and stuck by its outlook for comparable earnings per share to grow 5% to 6% from a year ago.
For the three months ended July 1, net income was $1.91 billion, or 44 cents per share. A year ago, it was $2.62 billion, or 61 cents per share.
Coca-Cola said its revenue in the second-quarter increased 12% from a year ago on higher pricing and an increase in global case volume, which was driven by recovery in its away-from-home business. Before the pandemic, Coca-Cola generated about half of its revenue from away-from-home occasions, like soda purchases at movie theaters or restaurants.
The company has raised prices to manage higher costs on freight, high fructose corn syrup and aluminum. But CEO James Quincey said in April that consumers won’t swallow inflation endlessly.
Earlier in July, rival PepsiCo reported organic sales growth of 13% during its second quarter, fueled largely by higher prices for its snacks and drinks. Pepsi executives said that they expect inflation to worsen in the second half of the year.
Shares of Coke were up about 1% at $62.79 in pre-market trading.

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The Nord Stream 1 pipeline, through which Russian natural gas has been flowing to Germany since 2011, will be shut down for around 10 days for scheduled maintenance work.
Picture Alliance | Picture Alliance | Getty Images

Natural gas prices are surging around the world as scorching temperatures stoke demand for the fuel, and as Europe’s push to move away from Russian fuel roils global energy markets.
U.S. natural gas futures surged more than 11% at one point on Wednesday to $9.75 per million British thermal units (MMBtu), the highest level since July 2008. The contract later pulled back slightly, and traded at $9.36 per MMBtu at 9 a.m. on Wall Street for a gain of 7.3%.

Natural gas is now up more than 77% for the month, putting it on track for the best month going back to the contract’s inception in 1990.
“Although the magnitude and speed of recent natural gas price gains point to contributing non-fundamental market dynamics, supportive fundamentals are nonetheless the primary driver,” EBW Analytics Group wrote in a note to clients.
“Fundamentally, scorching hot weather is the predominant bullish driver,” the firm added.
The contract for August delivery expires Wednesday, which is heightening volatility ahead of the roll. Volume is typically thin ahead of expiration, which means that individual trades can lead to outsized market moves.

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Still, the contract for September delivery gained more than 7% on Tuesday to trade around $9.21 per MMBtu.

In Europe, Dutch TTF natural gas futures jumped 10% to 194.50 euros per megawatt-hour. The move follows a 10% gain on Monday after Gazprom said it would further reduce flows through the vital Nord Stream 1 pipeline.
Beginning Wednesday, the pipeline will operate at just 20% of its capacity. Gazprom has said the cuts are thanks to turbine maintenance.
“This is not the end of Russia’s weaponization of natural gas flows, in our view, and there remain few near-term alternatives for even current reduced flows to the EU – lending [to] ongoing upside price risks,” RBC wrote last week in a note to clients.

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European Union countries on Tuesday reached a deal to voluntarily reduce gas consumption by 15% starting next month. In an emergency, the suggested cuts would become mandatory.
“The purpose of the gas demand reduction is to make savings ahead of winter in order to prepare for possible disruptions of gas supplies from Russia that is continuously using energy supplies as a weapon,” the bloc said in a statement.
U.K. natural gas futures surged 11.7% on Tuesday.

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The IMF now expects the world economy to grow 3.2% in 2022 before slowing to a 2.9% GDP rate in 2023 — marking a downgrade of 0.4 and 0.7 percentage points, respectively, from April.
The Washington-based institute said the revised outlook indicated that the downside risks outlined in its earlier report were now materializing.
Those include soaring global inflation, China’s slowdown and the war in Ukraine.

The International Monetary Fund on Tuesday cut its global growth projections for 2022 and 2023, dubbing the world’s economic outlook “gloomy and more uncertain.”
The IMF now expects the world economy to grow 3.2% this year, before slowing further to a 2.9% GDP rate in 2023. The revisions mark a downgrade of 0.4 and 0.7 percentage points, respectively, from its April projections.

The Washington-based institute said the revised outlook indicated that the downside risks outlined in its earlier report were now materializing. Among those challenges are soaring global inflation, a worse-than-expected slowdown in China and the ongoing fallout from the war in Ukraine.
“A tentative recovery in 2021 has been followed by increasingly gloomy developments in 2022,” the report said.
“Several shocks have hit a world economy already weakened by the pandemic: higher-than-expected inflation worldwide — especially in the United States and major European economies — triggering tighter financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID19 outbreaks and lockdowns; and further negative spillovers from the war in Ukraine,” it added.
The anticipated slowdown would mark the first quarterly contraction in global real GDP since 2020. A “plausible” but less likely alternative scenario could see global growth fall to around 2.6% in 2022 and 2.0% in 2023, the IMF said, putting global growth in the bottom 10% of outcomes since 1970.
The World Bank last month slashed its 2022 global growth outlook to 2.9% from an earlier estimate of 4.1%, citing similar macroeconomic pressures.

The U.S., China, India lead downgrades

Worsening growth prospects in the U.S., China and India drove the IMF’s downward revisions.
The U.S.’s GDP outlook was lowered 1.4 percentage points to 2.3%, driven be weaker-than-expected growth in the first half of 2022, reduced household purchasing power and tightening monetary policy.
China’s economy was seen growing 1.1 percentage points short of previous estimates, following extended Covid lockdowns and a deepening real estate crisis. The world’s second-largest economy is now expected to grow 3.3% in 2022 — its lowest clip in four decades, barring the initial fallout from the Covid-19 crisis in 2020.

The IMF lowered its global growth outlook in July on the back of soaring global inflation, a worse-than-expected slowdown in China and the ongoing fallout from the war in Ukraine, which is fueling a food and energy crisis.
Sopa Images | Lightrocket | Getty Images

India’s forecast was cut 0.8 percentage points to 7.4%, largely due to less favorable external conditions and more rapid policy tightening.
Meanwhile, the euro zone’s outlook was lowered 0.2 percentage points to 2.6%, though the IMF said greater fallout from the war in Ukraine was likely to hit further in 2023, particularly in the major economies of Germany, France and Spain.
Russia’s economy contracted less than expected in the second quarter despite wide-reaching economic sanctions over its unprovoked invasion of Ukraine, the IMF said. Its 2022 projection was revised up 2.5 percentage points, though its estimated growth rate remains negative at -6.0%.

Global inflation continues to rise

It comes as inflation continues to track higher through 2022, led by rising food and energy prices.
Global inflation is now forecast to hit 6.6% in advanced economies and 9.5% in emerging market and developing economies this year — an upward revision of 0.9 and 0.8 percentage points, respectively.
With rising prices fueling a global cost-of-living crisis, the IMF said taming inflation should be policymakers’ number one priority.
“Tighter monetary policy will inevitably have real economic costs, but delay will only exacerbate them,” it said.

It added that policies to address higher energy and fuel prices should focus on the most vulnerable groups without distorting overall prices.
For months now, central banks have been progressively embracing tighter monetary policy. The European Central Bank last week joined the likes of the U.S. Federal Reserve and the Bank of England in raising interest rates — its first such move in 11 years.
Yet still, inflation has remained persistent, hitting 40-year highs in the U.S. and the U.K. last month.

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Beginning next year, customers will be able to find Glossier’s famous “Boy Brow” and “Cloud Paint” makeup products at LVMH-owned Sephora.
This marks Glossier’s first retail partnership, and it comes shortly after founder Emily Weiss stepped down as chief executive officer and handed the reins over to Kyle Leahy.

Glossier makeup bottles
John Sciulli | Getty

Makeup company Glossier announced Tuesday that customers will be able to find its popular “Boy Brow” and “Cloud Paint” products at Sephora stores starting next year as it pushes to expand its reach.
The move marks Glossier’s first retail partnership and comes after founder Emily Weiss stepped down as chief executive officer and handed the reins to Kyle Leahy, who was previously Glossier’s chief commercial officer.

Glossier, which tapped pop star Olivia Rodrigo as a brand ambassador earlier this year, said it is one of the most searched brands on Sephora’s website that is not currently available at the LVMH-owned chain. The company will hawk its products in Sephora shops across the United States and Canada as well as on Sephora’s website starting in early 2023.
In a statement, Leahy said making Glossier products available through another retailer “marks a new chapter” for the company. Glossier had struggled through the Covid pandemic, and shuttered the three stores it had at the time roughly two years ago. That included one in the SoHo neighborhood of New York City, where the company is based.
The company has since opened stores in Seattle, Los Angeles, Miami and London, and said Tuesday that it is also investing in opening up more of its own bricks-and-mortar locations. It’s scheduled to open locations in Washington, D.C., Atlanta, Philadelphia and Brooklyn, New York, by the end of this year. It also plans to open a flagship store in the SoHo in 2023.
Glossier’s struggles have persisted under Weiss, who founded the business in 2014 and gained a cult-like following among millennial and Gen Z women. In January, just six months after Glossier raised $80 million in fresh funding, it laid off dozens of corporate staff members.
Leahy, previously executive vice president and general manager of North America at the shoe brand Cole Haan, is hoping to lead the business into its next phase of growth.

By partnering with Sephora, Glossier joins companies like the mattress maker Casper and sustainable shoe company Allbirds that have forged a similar path. Initially, the companies sold only online, then opened up their own stores, before making their products available through other retail partners like Target and Nordstrom as well.
Glossier, which at one point was valued at more than $1 billion in the private markets, declined to comment on whether it plans to pursue an initial public offering.

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3M announced Tuesday that it will spin off its health care business into a separate publicly traded company.
The new business will focus on wound and oral care, healthcare IT and biopharma filtration, the material science company said in a release.
The announcement comes alongside 3M’s second-quarter earnings report.

3M announced Tuesday that it will spin off its health care business into a separate publicly traded company.
The new business will focus on wound and oral care, healthcare IT and biopharma filtration, the material science company said in a release. That includes products like its bandages, skin adhesives, oral aligners, air purifiers and optical lenses.

The company’s health care products also include the Bair Hugger surgical warming system, which is currently the subject of nearly 6,000 lawsuits. 3M maintains that the product has no relation to surgical-site infections.
3M health care products recorded more than $8 billion in sales in 2021. The transaction is expected to be completed by the end of next year, and 3M will maintain a 19.9% stake in the new company.
The announcement comes alongside 3M’s second-quarter earnings report. The company posted adjusted earnings per share of $2.48 on revenue of $8.7 billion, surpassing analyst expectations of $2.42 per share and revenue of $8.58 billion, according to Refinitiv consensus estimates.
Shares of the company were up about 4% premarket.
3M is simultaneously spinning off its food safety business. That branch will merge with Neogen and is expected to be divested by September.
—Reuters contributed to this report.

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McDonald’s second-quarter earnings topped estimates, but its revenue fell short of expectations.
Its net sales fell 3%, hurt in part by the closure of McDonald’s Russian and Ukrainian restaurants.
Global same-store sales rose 9.7% in the quarter, fueled by strong international growth.

A sign is posted in front of a McDonald’s restaurant on April 28, 2022 in San Leandro, California.
Justin Sullivan | Getty Images

McDonald’s on Tuesday said both higher prices and value items fueled U.S. same-store sales growth, which was higher than expected during its second quarter.
However, CEO Chris Kempczinski said the environment is still “challenging” as inflation and the war in Ukraine weighed on its quarterly results.

Shares of the company were roughly flat in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $2.55 adjusted vs. $2.47 expected
Revenue: $5.72 billion vs. $5.81 billion expected

McDonald’s reported second-quarter net income of $1.19 billion, or $1.60 per share, down from $2.22 billion, or $2.95 per share, a year earlier. The company reported a $1.2 billion charge related to the sale of its Russian business due to the war in Ukraine.
Excluding that charge, a French tax settlement and other items, the fast-food giant earned $2.55 cents per share.
Net sales fell 3% to $5.72 billion, hurt in part by the closure of McDonald’s Russian and Ukrainian restaurants.

Global same-store sales rose 9.7% in the quarter, fueled by strong international growth. Russian locations were excluded from the company’s same-store sales calculations, but Ukrainian restaurants were included.
U.S. same-store sales increased 3.7% in the quarter, topping StreetAccount estimates of 2.8%. The company credited strategic price hikes and its value offerings for its strong performance. Last quarter, McDonald’s executives said some low-income consumers were trading down to cheaper options in response to inflation.
The company’s international developmental licensed markets division saw its same-store sales climb 16% in the quarter. Same-store sales shrank in China as the government reimposed Covid restrictions, but growth in Brazil and Japan more than offset the market’s weak performance.
McDonald’s international operated markets segment reported same-store sales growth of 13%, fueled by strong demand in France and Germany.
Read the full earnings report here.

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General Motors reported second-quarter earnings that missed Wall Street’s estimates, after supply chain issues led it to ship fewer vehicles than expected.
GM also confirmed that it has secured the battery materials needed to build 1 million EVs a year by 2025.
The company maintained its previous earnings guidance for the full year, saying it expects to ramp up production in the second half.  

GM CEO Mary Barra talks with media prior to the start of the 2017 General Motors Company Annual Meeting of Stockholders Tuesday, June 6, 2017 at GM Global Headquarters in Detroit, Michigan.
Photo by John F. Martin for GM

General Motors reported second-quarter earnings Tuesday that missed Wall Street’s estimates after the company was unable to ship nearly 100,000 vehicles by quarter-end due to parts shortages.
But the company maintained its previous earnings guidance for the full year, saying it’s confident it will be able to ramp up production in the second half of 2022. It also confirmed it has locked in sufficient supplies of critical battery-related materials to support its mid-decade EV plans.

The company’s shares were down roughly 1% in premarket trading Tuesday.
Here are the key numbers, compared with Wall Street’s consensus expectations as compiled by Refinitiv.

Adjusted earnings per share: $1.14, versus $1.20 expected and $1.97 in the second quarter of 2021.
Revenue: $35.76 billion, versus $33.58 billion expected and $34.17 billion in the second quarter of 2021.
EBIT-adjusted: $2.34 billion, versus $4.12 billion in the second quarter of 2021.
EBIT-adjusted margin: 6.6%, versus 11.2% in the first quarter of 2022 and 12.0% in the second quarter of 2021.

CEO Mary Barra said in a statement that GM has “binding agreements” securing all of the battery-related raw materials it will need to build 1 million electric vehicles annually in North America by 2025, including “new multi-year agreements” announced Tuesday with Livent for lithium, and with longtime GM battery partner LG Chem for cathode material.  
Like other global automakers, GM has been working through supply chain disruptions for the last several quarters as Covid-19 outbreaks – and more recently, Russia’s invasion of Ukraine – have forced factory shutdowns and wreaked havoc with logistics around the world.
Those disruptions have been felt at GM’s U.S. dealers, where inventories continue to be tight. The dealers have had just 10 to 15 days’ worth of inventory over the last year, including through the second quarter, the company said Tuesday. That’s much tighter than the 60 to 90 days’ worth that was typical before the Covid-19 pandemic.

But GM expects to get more vehicles to its dealers soon. The company told investors on July 1 that it had about 95,000 vehicles with missing components in its inventory. It confirmed on Tuesday that it expects to complete and ship those vehicles — many of them high-margin SUVs — over the next few months.
GM, like most automakers, books revenue when a completed vehicle is shipped to dealers, not before.
“We have been operating with lower volumes due to the semiconductor shortage for the past year, and we have delivered strong results despite those pressures,” Barra said. “There are concerns about economic conditions, to be sure. That’s why we are already taking proactive steps to manage costs and cash flows, including reducing discretionary spending and limiting hiring to critical needs and positions that support growth.
“We have also modeled many downturn scenarios and we are prepared to take deliberate action when and if necessary,” she said.
Barra said that GM is still confident that it will meet its previous guidance for the full year. The company expects net income of between $9.6 billion and $11.2 billion for 2022.
“This confidence comes from our expectation that GM global production and wholesale deliveries will be up sharply in the second half,” she said.
Correction: General Motors reported an EBIT-adjusted margin of 6.6% for the second quarter of 2022. An earlier version of this story misstated the number.

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