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Coca-Cola Beats Earnings Estimates as Price Hikes Offset Declining Demand

Coca-Cola Beats Earnings Estimates as Price Hikes Offset Declining Demand
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  • PublishedOctober 24, 2024

Coca-Cola has reported third-quarter earnings and revenue that exceeded analysts’ expectations, driven by price increases that helped counterbalance declining demand for its beverages.

The company’s revenue for the quarter reached $11.95 billion, slightly above the $11.60 billion expected, while adjusted earnings per share came in at 77 cents, also surpassing the 74 cents forecasted by analysts.

Despite the positive earnings report, shares of Coca-Cola fell by 2% in premarket trading on Wednesday. The company reported a net income of $2.85 billion, or 66 cents per share, down from $3.09 billion, or 71 cents per share, in the same quarter last year.

Coca-Cola’s ability to exceed earnings expectations largely stemmed from its strategy of increasing prices, which boosted revenue by 10%. However, unit case volume—a key metric that strips out the impact of price changes—declined by 1%, indicating sluggish demand in some regions. The volume decline was particularly evident in international markets, including China and Turkey, as well as in product categories like water, sports drinks, and coffee.

In North America, Coca-Cola’s unit case volume remained flat, with shrinking demand for its water, sports drinks, coffee, and tea products offset by growth in its signature soda and juice beverages. The company noted flat demand for its sparkling soft drinks globally, with products like Sprite and its flagship Coca-Cola remaining stable.

Coca-Cola’s performance varied across regions, with North American and Latin American volumes staying flat, while unit case volume fell by 2% in both the Europe, Middle East, and Africa (EMEA) and Asia Pacific regions. The company cited specific challenges in China and Turkey as contributing factors to these declines.

The company’s juice, dairy, and plant-based beverages division saw a 3% volume decline, and its water, sports, coffee, and tea segment experienced a 4% drop, driven by a significant 6% fall in bottled water sales.

Despite the mixed results, Coca-Cola raised its full-year organic revenue growth forecast to around 10%, the upper end of its previous guidance. The company also reiterated its projection for comparable earnings per share to increase by 5% to 6%.

CNBC, Market Watch, and Business Wire contributed to this report.

Written By
Joe Yans