Coca-Cola's triumphant quarter

The company's brand, balance sheet and vision make a mockery of those of countries that interfere daily in our thinking.

By Jim Cramer Jul 18, 2012 10:49AM

Sometimes brands and management can triumph over pretty much everything. That's how I felt when listening to the Coca-Cola (KO) call last night. Here's a company that's dealing with economic and currency headwinds globally, a company that, given the circumstances, easily could have delivered a number that was merely fine.

 

It did just the opposite. Coca Cola exceeded pretty much everywhere, and it was almost a throwback to the old days -- because the areas that were most exciting, that had the best growth, were none other than Brazil, Russia, India and China.

 

Remember BRIC? Remember when BRIC used to save the day?

 

Plus, the traditionally tough markets, like Germany, Japan and the U.S. -- markets where there are competition and little growth -- were actually exceptionally good compared with expectations, with one believing it came at the expense of Pepsico (PEP). I don't know that for sure, and I know Pepsi isn't that big in Germany anyway. It would offer more of a challenge in Russia and China. Still, the aggressive nature of this old-line company in these mature markets took my breath away.

 

The most incredible aspect of this multinational company is how it deals with the fleeting, the currency and the commodity. For currencies, while Coca-Cola hedges, there is no doubt you are talking about severe, mid- to high-single-digit hits in the next six months. But even there, the company put a good face on it, saying it expects the big, bad compares to end by the second half.

 

As for the commodity issue, what about the price of corn? It's simply not important -- not when compared with last year's commodity line, which was bad on every single plane. We tend to forget that oil is the most important line item for most packaged-goods companies. We forget that the retreat of oil, simultaneous with the abatement of price cutting, turns into the kind of margins that surprise us, even for a predicable company like Coca-Cola.

 

Coca-Cola is a reminder that, if you focus only on fiscal cliffs and German intransigence and Chinese slowdowns, you miss what this market does best. You miss companies with superior management delivering better-than-expected quarters, which will then give you higher dividends and better capital appreciation.

 

Coke's brand, Coke's balance sheet and Coke's vision make a mockery of the brands and balance sheets and visions of the countries that interfere with our thinking every day. Management, pedigree, smarts -- they are all more powerful than taxes, budget deficits and even employment woes.

 

Sometimes I think that if we just talked stocks and didn't talk politics and its accoutrements, we would make you a lot more money.

 

Check that. We would almost always make you more money, and it would be a heck of a lot more interesting.

 

Hmm, it's something to think about.

 


Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.




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10Comments
Jul 18, 2012 2:28PM
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Never ceases to amaze me how many people post on his articles pure hatred. Ok. We get it. You don't like him. You think he is a hack. You think he gives bad advice. Yet you people never take the time to argue with valid points, just name calling and random rants. I don't agree with everything Cramer says but I have a valid argument when I disagree. In this case though, I think he is spot on. I've owned Coke for about a year now. Between stock gains and the generous dividends, I am up almost 20% and think there is plenty more to come. With the stock splitting 2-to-1 in August, I am hoping/expecting another jump. The only downside to Coke right now is New York City and some idiot politicians trying to control yet another aspect of our lives but that discussion is for another article.
Jul 18, 2012 6:18PM
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this hack takes credit for the acronym UPOD..........the acronym means under promise over deliver...

he lauds companies that practice UPOD ......he cackles about how great it is

to lie about guidance so you can do better than you promise...........IT'S FRAUD..........

no wonder he likes it...........................and again ....not hate .....just facts

Jul 18, 2012 3:22PM
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Personally I think MSN should ban WakuUpNow07 and Socialist 1 from making any more comments on this forum as all they do is spew vile and hate.  You two losers have nothing better to do then read this column each day so you can spew some more.   Go home you cry babies and maybe think about getting a real job so you can work 18 hours a day and earn big bucks like Cramer.
Jul 18, 2012 11:39AM
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"remember when BRIC used to save the day"

 

no..................... but i remember the market going straight down 700 points when you

said buy because of the "holy grail" chart formation

Jul 18, 2012 4:27PM
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FUTHERMORE I DON'T WORK BECAUSE I RETIRED EARLY 8 YEARS AGO...

WAAAAY BEFORE AGE 65 ON MONEY I MADE IN THE MARKET.......NOT SELLING CRAPPY

ADVICE AND PUMPING DUMPING STOCK

Jul 18, 2012 4:25PM
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the problem is that when cramer is "right" it is almost always after the fact...like his article today

 

where was he before the price rise? pumping and dumping something other than KO to the unwary

FACTS?

gold at 1900 now less than 1600

aa best dow stock of 2011 at 18 now at 9

countrywide at 45 now at 0

nyx stock of the year at 96 now at 30

no hate here ...just evidence of this guy scamming people....

i don't care if he "works" 25 hours per day.......just because you are good at it doesn't mean scamming is right

 

Jul 18, 2012 4:30PM
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THKBUTT.............sounds like he might be a birther or a teabag
Jul 18, 2012 11:36AM
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when nobody comments on this criminal it is a sign that people are on to his bs

 

having said that i hate to ruin a perfect zero comment, but everyone must still be warned of this

pump and dump hack..........MSN.. as long as you give this shyster space to continue his crimes

you are complicit in those crimes............dump this clown and allow someone with market knowledge to replace him

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