Analysts said the US was a bright spot for The Coca-Cola Co

Analysts said the US was a 'bright spot' for The Coca-Cola Co

The star-spangled banner is a shining beacon for the Coca-Cola Co, as analysts hail the US in an otherwise-challenging environment for the company.

In notes following Coca-Cola’s Q2 results last week, Cowen & Co analyst Vivien Azer called the North America segment, the US in particular, "a bright spot" for the company. CLSA’s Caroline Levy, meanwhile, described results for the continent as "strong". But, warned Levy, recent improvements in the US are "not enough for turnaround".

Stifel’s Mark D Swartzberg says there is "evidence of improvement in North America", but he adds that Coca-Cola's performance was "offset by disappointing price/mix in Asia Pacific".

Success in the US was boosted in part by Monster, in which the company has purchased a minority stake, according to Levy, and also by the timing of Independence Day shipments. Bonnie Herzog from Wells Fargo Securities also mentions the 4 July holiday, noting also that its timing "increased marketing spend (up double digits)".

"However," adds Levy, "its international business (75% of profit) remains under pressure", also pointing to Asia Pacific. Volume growth abroad has come "at the expense of price/mix", writes Levy.

Views were mixed on the company’s success in Latin America, with Cowen & Co’s Azer saying price/mix in Latin America had "re-accelerated".

"Indeed, while LatAm benefited from fully cycling Venezuela's "fair price" law, which was enacted in January 2014, we are encouraged to see the segment trending in the right direction," she adds.

But, for Levy, Latin America "remains under pressure". Referring to the numbers from the region, Levy says: "This continues a multi-year trend of lower volume growth and margins in LatAm, which accounts for 20% of profit, and the company does not expect a rebound in (Mexico or Brazil) near term."

Back in the US, and Cowen’s Azer pin-points pack sizes as potential winners in the market. "Rate, as well as mix, drove the increase during the quarter, as Coca-Cola raised prices on traditional packages (12oz cans and 2-litre bottles), while also realising strong volume growth in smaller pack sizes (mini cans were up double digits in Q2)."

Coca-Cola North America's president, Sandy Douglas spoke more on the topic of pack sizes in the firm's post-results conference call.