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The Coca-Cola Company (KO - Free Analyst Report), the world's largest beverage manufacturer, has reported solid second-quarter results. The company's top line advanced 5%, compared with the year-earlier period, to $8.7 billion. Earnings, meantime, increased at a double-digit clip from 2009 and slightly surpassed our estimate, climbing to $1.02 a share.

An improved operating landscape appears to have developed, as volume growth was realized in both the North America (2%) and International (6%) businesses. In fact, within the foreign operations, Europe was the only region to underperform, with volumes slipping 1%. Overall, although economic conditions are still a bit shaky, consumer sentiment has been improving to an extent.

Coca-Cola implemented several short-term strategies to weather the economic storm, and these initiatives likely aided the upbeat results. For instance, a more price-conscious packaging structure helped, especially since off-premise consumption seems to be an emerging trend. Heightened promotional activity boosted performance, as well.

Nevertheless, the beverage titan is keeping an eye on the long term. In a move very similar to that of its beverage rival PepsiCo (PEP), Coca-Cola is in the process of trying to purchase the North American assets of Coca-Cola Enterprises (CCE), its largest bottler. Once the deal is completed, barring any late hiccups, Coca-Cola would have control of about 80% of the North American distribution channel. And it may not end there since the beverage Goliath has not ruled out further bolt-on acquisitions. Consolidation makes sense since it should enable significant cost savings and a more streamlined business structure. Furthermore, it will allow new products to make their way to market at a much quicker pace.

Other long-term growth engines are present. Coca-Cola hopes to spur expansion in sparkling and still categories by an active innovation pipeline. New products that keep pace with shifting consumer trends enable it to capture repeat customers at a higher rate. In addition, emerging markets continue to provide vast opportunities. As a result, Coca-Cola intends to spend in these countries, especially in India and China. Such nations are in the process of rapid infrastructure development, and a growing middle class enhances growth prospects.

Although the near-term picture is still a bit uncertain, we are sanguine about the long-term outlook. Indeed, the company's growth agenda appears solid.

About The Company: Founded over a century ago, the Coca-Cola Company is the world’s largest beverage company, and one of its most recognizable. It distributes major nonalcoholic sparkling and still beverage brands (Coca-Cola, diet Coke, Sprite, Barq’s, Mr. PiBB, Fanta, Fresca, Dasani, Evian, Danone, Powerade, Minute Maid, and others) through bottlers around the world. The Coca-Cola Company offers both finished beverages, as well as syrups and concentrates.