๐ PRO: This Week in Visuals
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Today at a glance:
๐ฅค Coca-Cola: Pricing Power
โ๏ธ SAP: AI Tailwinds
๐ IBM: Consulting Comes Short
๐งโ๐ป ServiceNow: AI Adoption Soars
๐ถ T-Mobile US: Brighter Outlook
๐ฑ Verizon: Growth Concerns
๐ AT&T: Upgrade Cycle Questions
๐ฐ๏ธ Lockheed Martin: F-35 Delay
๐ฉ๏ธ Boeing: Exploring Space Sale
โ๏ธ Texas Instrument: Elusive Recovery
๐ง Lam Research: China Concerns Remain
๐ซ๐ท Sanofi: Opella Sale on Deck
๐ฆ UPS: Return to Growth
๐ณ Fiserv: Organic Growth Boost
๐ผ Moodyโs: Raised Guidance
๐ General Motors: ICE Sales Deliver
๐ฉ๏ธ Southwest Airlines: Elliott Agreement
๐ซ American Airlines: Cost Challenges
๐ฆท Align: Restructuring Announced
๐ก Appfolio: AI-Powered Outlook
1. ๐ฅค Coca-Cola: Pricing Power
Coca-Colaโs revenue fell 1% to $11.9 billion ($290 million beat), and adjusted EPS was $0.77 ($0.02 beat). The revenue decline was primarily due to currency headwinds. However, organic revenue grew 9% (vs. 6% expected), far outpacing PepsiCoโs 1% organic growth we discussed two weeks ago. The main reason? A 10% increase in price mix (across all categories). Despite the price hikes, unit case volume only declined 1%, demonstrating the brand's resilience in maintaining consumer demand.
While Coca-Cola reaffirmed its full-year EPS growth forecast of 5% to 6%, the company anticipates a โmore normalized level of pricingโ going forward. Looking ahead, the company faces challenges from a stronger dollar and the growing popularity of obesity drugs, which could weigh on future demand, particularly in North America.
2. โ๏ธ SAP: AI Tailwinds
SAP's revenue grew 9% year-over-year to โฌ8.5 billion (โฌ0.1 billion beat), with earnings ahead of expectations. The company demonstrated continued cloud momentum, with the segmentโs revenue growing 25% to โฌ4.4 billion. SAP is transitioning customers to a subscription-based cloud model, and its investments in AI are paying off.
CEO Christian Klein called out โstrong progress on Business AI with groundbreaking innovations such as SAP Knowledge Graph,โ contributing to a significant part of new cloud deals.
SAP raised its FY24 revenue outlook by $400 million to roughly โฌ29.7 billion and reaffirmed its cloud revenue guidance of โฌ17.0 to โฌ17.3 billion. The company's cloud backlog also grew 25% (or 29% in constant currency) to โฌ15.4 billion, indicating strong momentum. Despite an ongoing restructuring program, SAP has joined the list of software companies with AI tailwinds boosting their growth profile.