As consumers shrugged off higher prices for its namesake soda, Simply juice, and other drinks, Coca-Cola on Tuesday reported quarterly earnings and revenue that exceeded analysts’ expectations.
The company also raised its outlook for the entire year. In premarket trading, shares of Coca-Cola increased by more than 2%.
Coke’s net income for the third quarter was $3.09 billion, or 71 cents per share, up from $2.83 billion, or 65 cents per share, in the same period last year.
The beverage giant made 74 cents per share after taking transactions gains, restructuring expenses, and other items into account.
Excluding items, net sales increased 8% to $11.91 billion. Organic revenue increased 11%, which excludes the effects of acquisitions and divestitures.
Coke has increased the cost of its products over the past two years, as have many other businesses, citing rising input costs. However, the business announced in July that it had stopped raising prices in the US and Europe this year. Its prices increased 9% this quarter compared to the same period last year.
In contrast to its net revenue, which is unaffected by pricing and currency, Coke’s unit case volume increased by 2% in the third quarter despite its higher prices. Rival PepsiCo has experienced more drastic declines in demand, while Coke has seen a slight easing in demand.
The company’s volume in North America remained stable, but consumers purchased more Coke Zero Sugar and Fairlife dairy drinks. For comparison, Pepsi stated that the volume of beverages sold in North America decreased by 6% in the third quarter.
The volume of Coke’s beverage divisions all increased. Its divisions for juice, dairy, and plant-based beverages reported volume increases of 2% each. The volume of Coke’s water, sports, coffee, and tea businesses increased by 1%.
In contrast to its previous range of 5% to 6%, Coke now anticipates comparable earnings per share growth of 7% to 8% for the entire year. The company raised its projection for organic revenue from a previously expected range of 8% to 9% to one of 10% to 11% growth.
Coke anticipates a headwind from currency in the mid-single digits by 2024. The rest of the company’s 2024 outlook will be revealed when it reports fourth-quarter earnings early next year, according to the company.
CNBC
