Coca-Cola's Q3 Report Exceeds Expectations

Coca-Cola's Third Quarter Results

Coca-Cola (KO) reported strong third quarter performance on Tuesday, exceeding Wall Street's expectations with its financial report. Adjusted earnings were announced at $0.82, while Wall Street forecasts were at $0.78. Organic revenue increased by 6%, representing a slightly higher level than analysts' estimates.

Coca-Cola Chairman and CEO James Quincey stated, "Although the overall environment remains challenging, we have remained flexible, adapted our plans as needed, and invested in growth." He also added, "By offering 'options' across our entire beverage portfolio and leveraging the unique strengths of our franchise model, we have strengthened our leadership position."

Shares experienced an increase of more than 2% in pre-market trading. Global unit volume grew by 1%, outperforming analysts' expected growth of 0.75%. However, this development fell short of the 4% and 6% growth rates seen in the third quarters of 2022 and 2021.

In the Europe, Middle East, and Africa region, unit volume rose by 4%, while there was no change in North America and Latin America. The Asia-Pacific segment saw a 1% decline in volume. A noteworthy success, the Coca-Cola Zero Sugar option grew by 14%, benefiting from growth across all regions.

However, volume in juice, value-added dairy products, and plant-based beverages decreased by 3%. The company noted growth in Latin America, which was offset by declines in Asia. The water segment experienced a 3% volume increase, which came from all regions. North America led a 3% increase in sports drink volume. However, the volume for the Coca-Cola brand declined in the U.S. market.

Earlier in the year, Coca-Cola announced that it would add beverages containing real sugar to its U.S. portfolio this fall. However, it is certain that the current high fructose corn syrup in its product range will remain.

The company also maintains its guidance for the fiscal year 2025, expecting an adjusted earnings increase of approximately 3% and net income growth of 1% to 2%.

These results came after rival PepsiCo (PEP) exceeded both its top and bottom lines for the third quarter. PepsiCo stated that its U.S. snack business is undergoing a challenging process. Coca-Cola shares have increased by about 10% since the beginning of the year, while PepsiCo shares have remained flat.