Coca-Cola results beats forecasts, revenue rises to $10.8 bn
Revenue rose 7 per cent to $10.8 billion for the October-December period. That topped Wall Street's forecast of $10.7 billion, as per analysts.
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Coca-Cola reported higher-than-expected revenue in the fourth quarter as growth in Mexico, Germany and other markets offset lower demand in the US. Unit case volume grew 2 percent for the quarter, primarily driven by growth in juice, value-added dairy and plantbased beverages and sparkling flavors. The growth was led by India and China.
Revenue rose 7 per cent to $10.8 billion for the October-December period. That topped Wall Street's forecast of $10.7 billion, as per analysts.
Revenue growth will likely moderate this year, Coke said. The company expects full-year organic revenue will grow 6 per cent to 7 per cent this year, down from last year's 12 per cent growth. Coke's revenue got a 10 per cent boost from higher prices last year, but those price increases are expected to moderate along with inflation. Unit case volumes rose 2 per cent in the quarter, led by sparkling soft drinks, juices and Coca-Cola Zero Sugar. Sports drinks, coffee and tea all saw lower demand.
In North America, unit case volumes declined 1 per cent as growing sales of juice, dairy and Coca-Cola were offset by falling demand for water, sports drinks, coffee and tea. Coke said its prices rose 8 per cent during the quarter. While that was down from the double-digit price increases the company put in place earlier in 2023, Coke has said that higher prices are pinching some consumers and forcing them to trade down to store brands. Unit case volumes grew in Coke's other global markets.
Net income fell 3 per cent to $1.9 billion, or 46 cents per share. Without one-time items, including restructuring costs, the company earned 49 cents per share.
Full Year 2024
The company expects to deliver organic revenue (non-GAAP) growth of 6% to 7%.
For comparable net revenues (non-GAAP), the company expects a 2% to 3% currency headwind based on the current rates and including the impact of hedged positions, in addition to a 4% to 5% headwind from acquisitions, divestitures and structural changes.
The company’s underlying effective tax rate (non-GAAP) is estimated to be 19.2%. This does not include the impact of ongoing tax litigation with the IRS, if the company were not to prevail.
Given the above considerations, the company expects to deliver comparable currency neutral EPS (non-GAAP) growth of 8% to 10% and comparable EPS (non-GAAP) growth of 4% to 5%, versus $2.69 in 2023.
Comparable EPS (non-GAAP) percentage growth is expected to include a 4% to 5% currency headwind based on the current rates and including the impact of hedged positions, in addition to an approximate 2% headwind from acquisitions, divestitures and structural changes.
The company expects to generate free cash flow (non-GAAP) of approximately $9.2 billion through cash flow from operations of approximately $11.4 billion, less capital expenditures of approximately $2.2 billion. This does not include any potential payments related to ongoing tax litigation with the IRS.
