It's been a tough few weeks for the stock market, as major market benchmarks have once again fallen close to their recent lows for 2022. Rampant inflation and other macroeconomic and geopolitical pressures are wreaking havoc on Wall Street's sentiment, and the ripples are making their way across the stock universe to affect even some of the largest companies in the world. As of 7:15 a.m. ET, futures on the Dow Jones Industrial Average (^DJI -0.31%) were down another 255 points to 33,473. S&P 500 (^GSPC -0.23%) futures had dropped 36 points to 4,232, while Nasdaq Composite (^IXIC -0.09%) futures had lost 108 points to 13,246.
Earnings season is moving into high gear, and a couple of key players outside the technology space are weighing in Monday morning with their latest results. Shares of Coca-Cola (KO 0.10%) and Otis Worldwide (OTIS -0.14%) didn't make big moves following the release of their most recent numbers, but investors watched closely for signs of what their business conditions might suggest for the broader global economy.
Coca-Cola stays solid
Shares of Coca-Cola were up a fraction of a percent in premarket trading on Monday morning. The beverage giant reported solid growth numbers but also pointed to some pressures that are similar to what many companies in the consumer products space are facing right now.
Coca-Cola's first-quarter financial results maintained the company's overall momentum. Revenue was up 16% to $10.5 billion on an 18% rise in adjusted organic revenue. Global unit case volume rose 8%, and concentrate sales were higher by 11%. In addition, Coca-Cola benefited from a more favorable sales mix and used its pricing power to offset some inflationary pressures. That helped boost operating margin by more than 2 percentage points to 32.5%, and adjusted earnings jumped 16% to $0.64 per share.
Even with its good performance, Coca-Cola had to deal with some challenges. Cash flow from operations and free cash flow were both down about $1 billion from year-ago numbers, as Coca-Cola paid out higher annual incentives during the latest period. Moreover, with the war in Ukraine leading the company to suspend its business in Russia, Coca-Cola estimated its full-year 2022 results will take a 1% hit on unit case volume, costing the beverage giant about 1% to 2% of its sales and $0.04 per share in adjusted earnings.
Nevertheless, Coca-Cola expects to maintain its long-term growth, with full-year revenue rising 7% to 8% and adjusted earnings rising 8% to 10% on a currency-neutral basis. That kind of reliability is exactly what many defensively minded investors are looking for right now.
Otis presses the up button
Meanwhile, shares of Otis Worldwide were also little changed on Monday morning. The elevator specialist reported modest gains in its first-quarter financial results, which signaled a strong foundation for its business going forward.
The numbers from Otis showed continued demand for its products. Net sales inched higher by 0.2% for the quarter, but organic sales climbed more than 3% year over year to overcome currency-based headwinds in a strong-dollar environment. Adjusted net income climbed 5% to $329 million, and the resulting adjusted earnings of $0.77 per share were almost 7% higher than in the year-ago period.
Otis also reported significant jumps in new equipment orders, which rose 9% on a constant currency basis. The biggest growth was in Europe, the Middle East, and Africa, which saw mid-teen percentage gains. However, solid performance in the Americas and in Asia helped send overall backlog up 4% year over year. Meanwhile, service-related revenue climbed sharply, offsetting the supply chain issues that weighed on current equipment installations during the period.
Otis did make some revisions to its 2022 outlook to reflect the exclusion of its Russian business. However, even with that impact, Otis still sees gains ahead, and that's good news for those hoping to ride the elevator giant upward in the years to come.