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June-quarter sales and earnings at beverage giant Coca-Cola (KOFree Coca-Cola Stock Report) were a bit lacking. The company indicated that results fell below its expectations, as progress was hampered by weak economic conditions across much of the globe and unusually poor weather. On the top line, revenues slipped 3% from the prior-year period, to $12.75 billion, versus our estimate of a 1% increase. Profits managed to edge forward 3%, to $0.63 a share, but we had set our sights $0.02 higher. In response, we are trimming $750 million from our full-year revenue outlook, which now stands at $48.25 billion, essentially flat with 2012. We are, however, maintaining our earnings estimate of $2.15, which would represent a year over year increase of 9%.

On the positive side, Coke again managed to increase its share of the global nonalcoholic, ready-to-drink beverage market during the June period. The company didn't have much to show for it, though, as volumes inched ahead 1% year over year, compared with a 4% gain in the first quarter. From a growth perspective, Coke continues to have the most success in emerging markets. Volumes in the Eurasia/Africa business were up 9%, while it also registered big gains in a number of Pacific-region markets, including Vietnam, Indonesia, and Thailand. The progress in that part of the world, however, was tempered by lackluster results out of India (up 1%), Japan (up 1%), and China (flat). Meanwhile, challenging conditions continue to persist in the developed markets of Europe and North America, as reflected in volume declines of 4% and 1%, respectively.

Coke stock was a strong performer early in 2013, but support has cooled off a bit of late. Prior to the recent earnings release, the share price was up 15% year-to-date, while most of the leading equity benchmarks were showing gains in the high teens. The latest results seemed to fall a bit flat with investors, as the stock was bid down modestly on the news. Overall, though, this equity still appears to be worthy of consideration for conservative investors. These shares carry our Top rank (1) for Safety, while also offering an above-average dividend yield. Notably, the payout was raised 12% earlier this year, and the company should have little trouble extending its track record for annual increases in the 3 to 5 years ahead. At the current valuation, these high-quality shares offer good risk-adjusted total return potential to 2016-2018.

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.