The Coca-Cola Company (KOFree Coca-Cola Stock Report), the world's largest beverage company and a Dow-30 component, has reported modest profit growth for the June quarter. In all, earnings rose 3% from the year-earlier period, finishing at $0.61 a share, a penny below our estimate. (All per-share figures have been adjusted for the 2-for-1 stock split scheduled to occur on August 10th.) The bottom-line improvement was made possible by a 4% advance in case volumes, with still (non-carbonated) beverages climbing 9%. Sparkling beverages edged forward 2%. These gains helped the company to overcome currency headwinds and commodity-related increases in the cost of goods sold.

From a geographic perspective, the company continued to make its biggest strides in emerging markets, especially India, where volumes rose 20% in the June period. Russia, China, and Brazil also chipped in with mid-to-high single digit gains. In the developed world, Japan turned in a solid 4% increase from the year-earlier period, which had been weighed down by the aftereffects of that country's March, 2011 earthquake and tsunami. North America remained in positive territory (up 1%), as well, though operations in Europe were hurt by the Continent's economic woes, as well as unseasonable weather. Case volumes in that region fell 4% (after inching ahead 1% in the March quarter), while operating income declined 8%.

In all, we are keeping our full-year 2012 earnings estimate at $2.05 a share, which would represent an increase of 7% from 2011. Volume gains over the balance of 2012 will likely continue to push higher at a modest, possibly slightly slower, clip. Meanwhile, higher commodity costs figure to remain a drag on profits, though probably not to quite the same degree as seen earlier in the year. Looking into next year, share net should climb an additional 7%, to $2.20.

Investors had a generally favorable response to the company's latest results, pushing the stock up modestly on the news. Year-to-date, Coca-Cola shares are up roughly 10%, versus more modest, single-digit gains for the broader U.S. benchmarks. Most of the outperformance can be traced to the early spring, when investors gravitated to the shares of stable, noncyclical businesses in response to increasing concerns about the state of the global economy. Overall, KO stock remains a suitable core holding for conservative investors. It carries our top rank for Safety (1) and looks poised to deliver worthwhile, risk-adjusted total returns to mid-decade.

About the Company:The Coca-Cola Company is the world's leading marketer of ready-to-serve, nonalcoholic beverages. On any given day, 1.7 billion individual servings of the company's brands are consumed by people around the globe. The Atlanta-based company currently has more than 500 wholly owned and licensed brands, including 15 that generate $1 billion or more in annual sales.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.