Coca-Cola (KO 0.11%) reported first-quarter 2022 earnings before the markets opened on Monday, April 25. The longtime Warren Buffett favorite posted healthy growth in revenue and profits as consumers leave their homes more often. 

The iconic beverage brand captures a meaningful share of its business in away-from-home channels, so increasing consumer mobility is a good sign for its next several quarters. Let's look closer at its Q1 results and decipher what they could mean for investors. 

Two people drinking soda from the same soda bottle.

Image source: Getty Images.

Coca-Cola is firing on all cylinders 

Net revenue rose 16% to $10.5 billion in Coca-Cola's first quarter, which ended April 1. The growth was fueled by a combination of increased volume and higher prices. Like other businesses, Coca-Cola is experiencing rising costs and is offsetting the higher input prices with increases of its own. Price/mix contributed 7% to the total revenue growth in Q1. Interestingly, rather than sticking with straight price increases, Coca-Cola also changes package sizes to mask higher prices. For instance, instead of raising the price of a 20-ounce bottle by $0.10, it may replace it with a 16-ounce bottle at the same price.

"We are pleased with our first-quarter results as our company continues to execute effectively in a highly dynamic and uncertain operating environment," said James Quincey, chairman and CEO of the Coca-Cola Company. Quincey's uncertainty can partly explain why the company didn't upgrade goals for the rest of 2022.

KO EPS Diluted (TTM) Chart

KO EPS Diluted (TTM) data by YCharts

Earnings per share jumped 23% in the recently completed quarter to $0.64. Analysts on Wall Street expected EPS of $0.58 and revenue of $9.82 billion in Q1. The beat on the top and bottom lines would have done more to lift the stock had the company raised the outlook for the rest of the year. Management had guided investors to look for revenue growth between 7% and 8% for 2022 and EPS growth between 8% and 10%. The results in Q1 were comfortably ahead of the aforementioned targets, which could signal that management sees troubles ahead.

What this could mean for Coca-Cola investors 

KO Operating Margin (TTM) Chart

KO Operating Margin (TTM) data by YCharts

The stock has had a solid run over the last six months and is near record highs. Investors are attracted to the iconic beverage company for its strategic position to benefit from economic reopening and rising inflation. As demonstrated over the previous few quarters, Coca-Cola has pricing power it can exert as input costs rise. The company's unit volume has increased even through the price hikes it has implemented. Impressively, Coca-Cola's operating profit margin of 32.5% was 230 basis points higher than at the same time the previous year. Further, if it completes the rest of the year at that rate, it would be the first time its operating profit margin has exceeded 30% in the last decade. In a time of rising inflation hitting profit margins, investors find comfort in Coca-Cola's stock.