Coca-Cola reported stronger-than-expected quarterly earnings and revenue on Tuesday, driven by robust global demand for its beverages. The company’s shares rose over 4% in morning trading following the announcement.
Key Results for Q4 Ending Dec. 31:
- Earnings per Share: $0.55 (adjusted) vs. $0.52 expected
- Revenue: $11.54 billion vs. $10.68 billion expected
Coca-Cola posted a fourth-quarter net income of $2.20 billion, or $0.51 per share, up from $1.97 billion, or $0.46 per share, during the same period last year. Excluding restructuring charges, refranchising gains, and other items, the company earned $0.55 per share.
Revenue Highlights:
- Net Sales: Increased 6% to $11.54 billion
- Organic Revenue Growth: Up 14%, driven primarily by higher prices
Coca-Cola’s pricing rose 9% in the quarter, with 4% attributed to hyperinflation in certain markets. The remaining growth stemmed from strategic price hikes and a favorable product mix, as consumers gravitated toward higher-priced items.
Unlike many consumer goods companies, including competitor PepsiCo, Coca-Cola experienced both price-driven and volume growth. The company’s unit case volume, which reflects demand by excluding pricing and currency effects, grew 2%, reversing a decline from the previous quarter. This growth was fueled by strong demand in China, Brazil, and the U.S.
CEO James Quincey commented:
“In North America, we grew both transactions and volume, achieving robust top-line and profit growth during the quarter. Trademark Coca-Cola and Fairlife remain leaders in at-home retail sales growth.”
Segment Performance:
- Sparkling Soft Drinks: Volume rose 2%, with Coca-Cola Zero Sugar surging 13%
- Water, Sports, Coffee, and Tea: Volume grew 2%; strong demand for Smartwater and tea offset declines in sports drinks and coffee
- Juice, Dairy, and Plant-Based Beverages: Volume declined 1%, with growth in North America overshadowed by declines in Europe, the Middle East, and Africa
2025 Outlook:
Coca-Cola projects organic revenue growth of 5% to 6% and anticipates comparable earnings per share will rise 2% to 3%. This forecast accounts for a 6% to 7% currency exchange headwind and minor impacts from acquisitions, divestitures, and structural changes.
“In 2025, we expect a slight shift towards more price-driven growth and modest volume increases,” Quincey noted.
Potential Challenges Ahead:
Coca-Cola may face rising costs in 2025 due to new tariffs. President Donald Trump recently announced a 25% tariff on all aluminum imports, effective next month.
Quincey addressed these concerns, stating, “To maintain affordability and consumer demand, we have flexible packaging options. If aluminum cans become costlier, we can emphasize alternatives like PET plastic bottles.”
