Coca-Cola (KO) Q4 2023 earnings

Coca-Cola on Tuesday posted quarterly earnings that met expectations and sales that topped estimates, as higher prices helped the beverage maker overcome a volume decline in North America.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

• Earnings per share: 49 cents adjusted vs. 49 cents expected
• Revenue: $10.85 billion vs. $10.68 billion expected

Shares of the company closed down less than 1% on Tuesday.

Coke reported fourth-quarter net income of $1.97 billion, or 46 cents per share, down from $2.03 billion, or 47 cents per share, a year earlier.

Excluding items, the company earned 49 cents per share.

Net sales rose 7% to $10.85 billion. Coke’s organic revenue, which strips out acquisitions and divestitures, climbed 12% in the quarter.

Coke reported unit case volume growth of 2% for the quarter. The metric excludes pricing and foreign currency. Executives estimated that the conflict in the Middle East hurt volume growth by 1% in the fourth quarter.

North American volume shrank 1%, as demand for Coke’s water, sports drinks, coffee and tea fell. For comparison, rival PepsiCo saw volume for its North American beverage unit fall 6% in the fourth quarter. Pepsi executives said high borrowing costs and lower personal savings squeezed consumers’ budgets, leading shoppers to seek out private-label options or smaller pack sizes.

Coke CEO James Quincey said some North American consumers with less disposable income have been squeezed more by inflation. Those shoppers have focused more on affordability and spent more time at home.

But Quincey said another consumer segment has plenty of purchasing power.

“We’ve seen strong growth for some of the higher price point, premium segments, like Fairlife, Core Power, Simply, so there’s clearly multiple things going on in the landscape,” Quincey said.

For 2024, Coke is forecasting organic revenue growth of 6% to 7% and an increase in comparable earnings per share of 4% to 5%. The company expects that foreign exchange rates will weigh on both its earnings and revenue for the full year.

Looking to the first quarter, Coke is anticipating a 4% headwind from currency exchange rates on its comparable revenue. The company also expects foreign exchange to slow its earnings per share growth, and anticipates an 8% hit from currency changes during the period.

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