Coca-Cola recently announced its quarterly earnings, surprising analysts with better-than-expected results. The company’s revenue and earnings per share exceeded Wall Street’s projections, driven by higher prices that helped offset sluggish demand. Despite this positive news, Coca-Cola’s shares dropped by 2% in premarket trading.
In the third quarter, Coca-Cola reported a net income attributable to shareholders of $2.85 billion, or 66 cents per share, a decrease from the previous year. However, when excluding certain items, the company earned 77 cents per share, surpassing analyst estimates. Adjusted net sales also beat expectations, coming in at $11.95 billion, which was flat compared to the previous year.
Although unit case volume decreased by 1% globally, Coca-Cola’s organic revenue, which excludes acquisitions, divestitures, and currency impacts, increased by 9% during the quarter. The company saw growth in North America for its soda, juice, dairy, and plant-based beverages, but faced volume declines in China and Turkey. Despite challenges in international markets, Latin America reported flat volume.
Coca-Cola’s pricing strategy played a significant role in its financial performance, with prices rising by 10%. Approximately 4% of this increase was due to inflation in certain markets, such as Argentina, while the rest was attributed to price hikes and consumers opting for more expensive options.
Looking ahead, Coca-Cola raised its organic revenue growth outlook for 2024 to around 10%, at the higher end of its previous forecast. The company also reiterated its expectation of a 5% to 6% increase in comparable earnings per share. However, Coca-Cola anticipates challenges in 2025, with currency fluctuations likely to impact revenue and earnings negatively.
As Coca-Cola prepares to release its fourth-quarter earnings, investors are eager to see how the company will navigate the evolving economic landscape. Despite facing headwinds in some regions, Coca-Cola’s ability to adapt its pricing strategy and focus on organic revenue growth positions it well for future success in the competitive beverage industry.
