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Coca-Cola’s second-quarter earnings and revenue topped Wall Street’s estimates.
The beverage giant also raised its full-year outlook, following in the footsteps of rival PepsiCo.
Coke has been been raising prices across its portfolio, including another round of hikes during the first quarter.

Bottles of Coca Cola displayed at a grocery store on April 24, 2023 in San Rafael, California.
Justin Sullivan | Getty Images

Coca-Cola on Wednesday raised its full-year outlook after reporting earnings and revenue that topped estimates.
Shares of the company rose 2% 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: 78 cents adjusted vs. 72 cents expected
Revenue: $11.97 billion adjusted vs. $11.75 billion expected

The beverage giant reported second-quarter net income attributable to shareholders of $2.55 billion, or 59 cents per share, up from $1.91 billion, or 44 cents per share, a year earlier.
Excluding refranchising gains, restructuring costs and other items, Coke earned 78 cents per share.
Net sales rose 6% to $11.97 billion. The company’s organic revenue, which strips out the impact of acquisitions and divestitures, increased 11% in the quarter, fueled by higher prices.
Following its rival PepsiCo, Coke gave a rosier outlook for the rest of the year.

For 2023, Coke now expects comparable adjusted earnings per share growth of 5% to 6%, up from its prior forecast of a 4% to 5% rise. The company also hiked its outlook for organic revenue and now predicts an increase of 8% to 9%, up from its previous range of 7% to 8%.
Like many food and beverage companies, Coke has been hiking prices on its products in response to higher commodity costs. In the first quarter, it raised prices again, even as PepsiCo said it wasn’t planning to increase prices this year.
Coke’s pricing strategy hasn’t sparked significant backlash yet from customers. Worldwide, its unit case volume, which excludes the impact of pricing and currency changes, was flat for the quarter. Its U.S. volume fell just 1%, dragged down by falling demand for its namesake soda, Powerade and bottled water.
The company’s three drinks divisions all reported flat growth for the quarter, but there were some bright spots. Coke Zero Sugar’s volume rose 5%, thanks to strong demand in North America and Latin America.
Ultra-filtered milk brand Fairlife saw strong growth in the U.S. Coke’s coffee division also reported volume growth of 5%, fueled by Costa Coffee’s performance in the United Kingdom and China. More

Top Mattel executive Richard Dickson has been chosen as Gap’s next CEO, capping off a year-long search.
The toymaker’s president and chief operating officer is credited with reviving the Barbie franchise during his tenure.

Pedestrians walk past Old Navy and GAP stores in Times Square, New York City.
Drew Angerer | Getty Images

Gap announced Wednesday it’s poached a top Mattel executive to be its new CEO as the apparel giant seeks to reverse an ongoing sales slump and regain its relevancy in the fashion industry.
Richard Dickson, the president and chief operating officer at Mattel, was chosen as Gap’s top boss after a year-long search that began last summer when former CEO Sonia Syngal left the company.

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Since then, Gap’s chairman Bob Martin has been serving as interim CEO – a position he didn’t expect to hold as long as he had as the company struggled to find the right person for the role, he told investors during a May earnings call. 
During his tenure with Mattel, Dickson is credited with reviving the Barbie franchise and growing the toymaker’s other top brands, including Hot Wheels and Fisher-Price, according to Mattel.
He first joined Mattel in 2000 and most recently led its global brand portfolio, overseeing strategy, brand marketing, design and development. In the position, he also oversaw franchise management, including licensing and merchandising, live events and digital gaming.
Dickson has also held positions at Bloomingdales and The Jones Group. The Wall Street Journal first reported his appointment to Gap. 
Dickson joins Gap at a low-point in the retailer’s history.

The company has been grappling with a years-long sales slump and a series of leadership shakeups across its portfolio of brands, which includes Athleta, Banana Republic, Old Navy and its namesake banner. 
Since last fall, Gap has laid off more than 2,000 workers in an effort to streamline operations and cut costs. 
In its most recent quarter ended April 29, sales were down 6% from the year-ago period to $3.28 billion. It reported a quarterly net loss of $18 million, improvement from a loss of $162 million in the prior year.  More

Boeing posted a narrower loss and bigger sales than analysts expected.
The company generated $2.6 billion of free cash in the quarter, ahead of analyst forecasts.
Boeing’s defense, space and security unit reported a loss of $527 million for the quarter, down from a profit a year ago.

An employee walks past a Boeing 737 Max aircraft seen parked at the Renton Municipal Airport in Renton, Washington, January 10, 2020.
Lindsey Wasson | Reuters

Boeing results topped analyst expectations Wednesday thanks to a pickup in commercial aircraft deliveries as the manufacturer increases production, but losses in its defense and space businesses drove the manufacturer into the red for the quarter.
The company generated $2.6 billion of free cash in the quarter, ahead of analyst forecasts, and reiterated its full-year guidance of between $3 billion and $5 billion of free cash flow.

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Boeing shares were up more than 3% in premarket trading after releasing results.
Here’s how the company performed during the period ended June 30, compared with Refinitiv consensus estimates

Adjusted loss per share: 82 cents vs. 88 cents.
Revenue: $19.75 billion vs. $18.45 billion

Boeing and main rival Airbus have both struggled to increase aircraft production in the wake of the pandemic as some airlines face longer waits for new jets, just as travel demand rebounds.
The company delivered 136 planes in the second quarter, up from 121 aircraft during the same period last year.
Boeing said Wednesday that it is transitioning to higher production of its best-selling Max aircraft, at a pace of 38 jets a month, up from 31 a month — a plan it outlined earlier this year. Boeing reiterated its 737 delivery forecast of between 400 and 450 planes this year.

Boeing said it raised output of its 787 Dreamliner aircraft to a planned four per month and stuck with a plan to produce five a month by the end of the year. It expects to deliver as many as 80 of the wide-body planes in 2023.
Boeing earlier this year reported quality issues in both programs but has maintained delivery projections.
“With demand strong across our key markets, it is important that we stay focused on execution and on driving stability in our factories and supply chain to ensure we meet our customer commitments,” CEO Dave Calhoun said in a message to employees on Wednesday.
Boeing’s second-quarter revenue jumped 18% from a year ago to $19.75 billion, but the company still reported a net loss of $149 million, or 25 cents per share. That compares with a profit of $160 million, or 32 cents per share, a year ago, with the most recent quarter’s results weighed down by charges in Boeing’s defense and space units.
On an adjusted basis, the company reported a loss of $390 million, or 82 cents per share.
Boeing’s defense, space and security unit reported a loss of $527 million for the quarter, down from a profit a year ago.
The company said it took a $257 million loss on a launch delay of its crewed Starliner spacecraft, a $189 loss due to higher production costs on its T-7A Red Hawk trainer jet and a $68 million loss on production delays on its MQ-25 program. More

Kraft Heinz’s Maxwell House is launching instant iced lattes with foam, its first new product in nearly a decade.
The coffee brand has been losing ground to other players, including coffee shops like Starbucks and Dunkin’.
Maxwell House hopes to attract younger consumers with the new product line.

Maxwell House’s new Iced Latte with Foam
Source: Kraft Heinz

At 131 years old, Maxwell House is no spring chicken, and most of its loyal drinkers aren’t either.
But Kraft Heinz is looking to revive the coffee brand by appealing to younger consumers with its new iced latte with foam, its first product launch in nearly a decade.

Once the country’s top coffee brand, Maxwell House has fallen out of favor with consumers who have grown more sophisticated in their coffee habits and adopted espresso machines, French presses and cold brew makers at home.
Even within the instant coffee segment, Maxwell House ranks third, trailing Nestle’s Nescafe and JM Smuckers’ Folgers in U.S. market share, according to Euromonitor International data.
Maxwell House also faces competition from the likes of Starbucks and Dunkin’, both of which offer more convenience and variety at a higher price tag than home-brewed coffee.
But with its new Iced Latte with Foam, Maxwell House hopes to bridge that gap and win over new customers. Kraft Heinz touts the instant drink as the first of its kind, requiring just one packet, a cup of cold water and a spoon.
The iced latte with foam is available nationwide at major retailers and on Amazon and comes in three flavors: vanilla, hazelnut and caramel. Each $6.99 package contains six packets, giving each individual iced latte a price of just $1.17.

Energizing sales

Parent company Kraft Heinz mulled selling its coffee unit back in 2019, when the food giant was looking to overhaul its ailing business. Instead, it held on to the coffee brands, but they weren’t a focal point of its turnaround strategy, which centered on other iconic brands like Oscar Mayer.
However, Kraft Heinz now seems to have a revived interest in coffee sales.
“When I came on about a year and a half ago, there was a kind of turning point in interest in rejuvenating the Kraft Heinz coffee business,” said Tiffin Groff, head of Kraft Heinz’s North American coffee business.
Last year marked the first that Maxwell House gained market share since 2016, Groff said. She joined Kraft Heinz from Peet’s Coffee, where she spent 12 years growing its packaged-coffee business.
Under Groff’s leadership, Kraft Heinz launched IHOP-branded coffee in retailers in April. That new line is already attracting younger consumers than the loyal Maxwell House drinker, she said.
Next year, Kraft Heinz will launch iced lattes with foam under the IHOP name.
The new product line follows the consumer trend of drinking more cold coffee beverages. For example, Starbucks says more than half of its total U.S. drink sales are cold beverages. Millennials and Gen Z are the biggest consumers of cold coffee drinks.
And while the idea of an iced latte with foam is nothing new, making cold coffee drinks at home has always been a challenge. Only 7% of coffee consumed at home is cold, according to NPD Group data cited by Kraft Heinz.
For Maxwell House, the hope is that the new product line will drive more growth for the mature brand.
Next year, the brand will get a facelift, with updated packaging and a new tagline: “Live Life to the Last Drop.” More

RTX cut its 2023 free cash flow outlook by about $500 million due to the issue.
The company’s Pratt & Whitney unit makes the engines.
The FAA said it is in contact with the manufacturer about the issue.

A Pratt & Whitney PW1000G turbofan engine sits on the wing of an Airbus A320neo aircraft during a delivery ceremony outside the Airbus Group SE factory in Hamburg, Germany, on Friday, Feb. 12, 2016.
Bloomberg | Krisztian Bocsi

Shares of RTX tumbled 10% on Tuesday after the aerospace giant said a manufacturing problem with some of its popular engines will require “accelerated” inspections on about 200 of them.
The problem stems from powdered metal used to make some engine parts, RTX, the parent of airplane engine maker Pratt & Whitney, said during a quarterly earnings call. Engines currently in production are not affected, the company said.

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RTX, previously known as Raytheon Technologies, trimmed its cash flow outlook for the year by $500 million to $4.3 billion due to the problem.
“It’s going to be expensive,” RTX CEO Greg Hayes said during the company’s earnings call. “We’re going to make the airlines whole as a result of the disruption we’re going to cause them.”
The problem is the latest challenge for airlines on top of late aircraft from manufacturers, as carriers seek to reap the rewards of a travel boom with limited numbers of available planes.
Pratt & Whitney said that it also expects about 1,000 more engines will have to be removed from airline fleets over the next nine to 12 months.
Noah Poponak, aerospace and defense equities analyst at Goldman Sachs, said the impact could spill into next year and potentially 2025, depending on how many of the roughly 1,000 engines will need to be sent to repair shops sooner than scheduled.

“I think the stock reaction is actually reasonable,” said Poponak, who has a neutral rating on RTX with a 12-month price target of $102. Shares closed at $87.10 on Tuesday.
The engines have had other challenges that have required maintenance, particularly when operating in hot climates, Poponak noted.
RTX said it will continue to deliver new aircraft engines and parts. A spokesman told CNBC that the issue does not affect flight safety.
The issue will impact some A320neos, a narrow-body plane and one of the world’s most popular aircraft. It competes with the Boeing 737 Max.
The Federal Aviation Administration said it is aware of the issue and is in contact with Pratt & Whitney as well as airlines affected by the problem
“The agency will ensure that the appropriate steps are taken,” the FAA said.
Delta Air Lines, a major Airbus customer, said it is looking into the issue. Airbus didn’t immediately comment. A JetBlue Airways spokeswoman said the carrier is “working with Pratt to assess the impact to our fleet.”
Meanwhile, shares of General Electric, a rival engine maker, added more than 6% on Tuesday to a more than five-year high, after the conglomerate raised its revenue and cash flow forecast for the year, in part because of strong demand for jet engines. More

UPS and the Teamsters said they reached a tentative deal on a new contract.
The labor agreement is still subject to a ratification vote by the more than 300,000 workers.
The preliminary deal includes wage increases for both full- and part-time workers.

UPS and the Teamsters union representing about 340,000 workers at the package carrier on Tuesday said they reached a preliminary labor deal that includes raises for both full- and part-time workers and narrowly avoids a potential strike that could have started next week.
It was the latest in a string of labor deals where workers from pilots to aerospace manufacturing employees have pushed for and won higher pay.

The agreement is worth $30 billion, according to Teamsters General President Sean O’Brien.
“The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it,” he said in a statement.
Existing part-time workers will get a raise to at least $21 an hour, if workers approve the new contract, the union said. Part-time pay was a sticking point in negotiations. Full-time workers will average $49 an hour. Current workers will get $2.75 more an hour this year and $7.50 an hour more during the five-year contract.
The deal would also end mandatory overtime on drivers’ days off, according to an outline of the contract provided by the Teamsters.
“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” UPS CEO Carol Tomé. “This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong.”

United Parcel Service (UPS) driver pushes a dolly of packages towards a delivery van on a street in New York.
Victor J. Blue | Bloomberg | Getty Images

Workers still need to ratify the tentative deal. Teamsters-represented UPS employees voted to authorize a strike after July 31 if the two sides didn’t reach an agreement. The labor stoppage could have rippled throughout industries like retail that rely heavily on the package delivery giant.
The National Retail Federation cheered the tentative agreement.
“UPS is a major partner of the retail industry, and we are grateful it came to an agreement with the Teamsters without disruption to the marketplace,” Matthew Shay, CEO of the trade group, said in a statement. “Retailers rely on stability within their supply chains, and this agreement will bring long-term stability, as well as assurance to the millions of businesses and employees who rely on smooth and efficient last-mile delivery.”
Some recent labor negotiations haven’t yielded new contracts, despite preliminary deals. On Monday, pilots at UPS rival FedEx rejected a tentative labor deal, with 57% voting against the agreement.
— CNBC’s Melissa Repko contributed to this report. More

MARK ZUCKERBERG dubbed 2023 as Meta’s “year of efficiency”, corporate-speak for admitting that his social-media empire was bloated. Since November Meta has cut 21,000 jobs, or about a quarter of its workforce. Bosses of its fellow tech titans have also embraced the efficiency mantra. Alphabet (Google’s corporate parent), Amazon and Microsoft have collectively shed more than 50,000 jobs since October. As big tech reports its earnings this week expect more talk of “re-engineering the cost base”. The bloodletting (in plain English) is not limited to the giants. According to layoffs.fyi, a website that tracks sackings, nearly 900 technology companies around the world have announced total job cuts of more than 220,000 in 2023.The slump has hit younger firms hardest of all. Rising interest rates make upstarts’ promise of rich profits far in the future look less juicy in the here and now. As a result, venture capitalists are stinting. Globally, venture-capital investment in the first half of this year was $144bn, less than half of the $293bn raised by startups in the same period in 2022. Companies that do manage to raise funds are seeing their valuations squeezed. According to Carta, an equity platform for startups, in the first quarter of 2023 almost a fifth of all venture deals were “down rounds”, where companies raise capital at a lower valuation than before. The valuation of Stripe, a fintech star, fell from $95bn to $50bn after its latest funding round in March.That is forcing aspiring Alphabets and Metas to follow their role models in rethinking some of the habits acquired during the years of easy money. Efficiency is the talk of Silicon Valley. Companies accustomed to spending with abandon to win market share are finding themselves in the unfamiliar position of having to trim fat. And there is plenty of fat to trim. A good place to start is payroll. Battle-hardened founders grumble that salaries are the biggest expense for young firms. In July startup job postings on Hacker News, a news site for coders, were down by 40% compared with the same month last year (see chart 1). The average startup is already looking leaner. Numbers from CB Insights, a data provider, show that the median number of employees at young firms has been steadily declining. In 2018 the typical firm that raised a total of between $10m and $25m had around 50 employees. In 2023 a similar one would employ 41. It is a similar story for larger startups, all the way to late-stage firms which have raised more than $500m (see chart 2). In the go-go years firms hired lots of people who did not have that much to do. Not anymore. Most startups, points out Tom Tunguz, a venture capitalist, can run with smaller teams, with a negligible impact on revenues. Tech firms are, naturally, embracing artificial intelligence (AI). An AI “co-pilot” on GitHub, a Microsoft-owned platform for open-source programs, improves coders’ productivity by 30%. And it is not just the geeks who benefit. Other employees use AI-based tools, from chatbots like ChatGPT that churn out emails for marketers to clever software that improves sales efficiency. One founder of an early-stage startup with fewer than ten employees estimates that AI has already boosted his company’s productivity by 30-40%. The austere spirit is visible even among one of the few categories of startup that is unaffected by investors’ newfound stinginess: those which develop all the AI tools. Anthropic, a firm founded by defectors from OpenAI, which created ChatGPT, has raised $1.2bn with 160 employees. Adept, a company started by former employees of DeepMind, an AI lab owned by Alphabet, has raised $415m with 37 employees. Compare that with darlings of the previous startup boom. Klarna, a Swedish payments firm that experienced wild growth in the go-go years, had 2,700 employees by the time it raised $1.2bn. Databricks, a database-maker, had a staff of 1,700 at a similar stage. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Prices nationally rose 0.7% month to month, seasonally adjusted.
The index’s 10-city composite fell 1%, year over year, slightly less than the 1.1% decrease in the previous month.
The 20-city composite dropped 1.7%, the same as the annual decline in April.

Home prices in May rose for the fourth straight month on the S&P CoreLogic Case-Shiller home price index, but regional differences are widening.
The gains come despite a sharp jump in mortgage interest rates during the month.

Prices nationally rose 0.7% month to month, seasonally adjusted. The index’s 10-city composite gained 1.1%, and the 20-city composite gained 1%.
Prices nationally were still down 0.5% compared with May 2022, but they are just 1% below their June 2022 peak.
The 10-city composite fell 1%, year over year, slightly less than the 1.1% decrease in the previous month. The 20-city composite dropped 1.7%, the same as the annual decline in April.
“Home prices in the U.S. began to fall after June 2022, and May’s data bolster the case that the final month of the decline was January 2023,” said Craig Lazzara, managing director at the S&P DJI. “Granted, the last four months’ price gains could be truncated by increases in mortgage rates or by general economic weakness. But the breadth and strength of May’s report are consistent with an optimistic view of future months.”
Lazzara, however, noted that “regional differences continue to be striking,” with cities in the so-called Rust Belt outperforming the rest of the nation. Prices in Chicago gained 4.6%; in Cleveland, 3.9%; and New York, 3.5% — making for the top performers. The Midwest took over the South’s reign as the strongest region.

“If this seems like an unusual occurrence to you, it seems that way to me too. It’s been five years to the month since a cold-weather city held the top spot (and that was Seattle, which isn’t all that cold),” added Lazzara.
Of the 20-city composite, 10 cities saw lower prices in the year ended May 2023 versus the year ended April 2023 and 10 saw higher prices.
Cities in the West, where prices had inflated the most, were the worst performers in May. Seattle, down 11.3%, and San Francisco, down 11%, were the worst.
Prices are rising again because supply is still very low. Current homeowners are reluctant to sell, given that most are paying mortgage rates that are less than half of today’s rates. Demand returned after the initial jump in mortgage rates, as buyers seem to be getting used to a new normal.
“The housing market remains unaffordable for many buyers, but some areas are seeing high levels of competition as a result of low for-sale inventory,” said Hannah Jones, research analyst at Realtor.com. “Limited existing home stock means many markets are seeing competition reminiscent of the last few years.”
Correction: Home prices in May rose for the fourth straight month on the S&P CoreLogic Case-Shiller home price index. An earlier version misstated the number of months. More