coca-cola (KO.US) In the third quarter, a significant price increase of over 10% offset some of the impact of weak market demand, with both revenue and profit exceeding Wall Street's expectations for the quarter.
Thanks to a significant price increase offsetting some of the impact of weak demand, Coca-Cola's third-quarter revenue and profit both exceeded Wall Street's expectations.
On October 23, before the US stock market opened, Coca-Cola released its third-quarter (three months ending September 27) financial report.
1) Key Financial Figures:
In the third quarter, net revenue decreased by 1% to $11.9 billion, slightly higher than the expected $11.6 billion; organic revenue (excluding acquisitions, asset divestitures, and exchange rate impacts) increased by 9% for the quarter;
Adjusted earnings per share were $0.77, a 7% year-on-year decrease, surpassing the expected $0.74 per share;
Net income attributable to shareholders was $2.85 billion, down 8% year-on-year;
Operating margin is 21.2%, down 6.2 percentage points from the same period last year's 27.4%.
Expected Q3 revenue growth of 3.25%-4.25% and adjusted earnings per share of 0.51-0.52 US dollars, below the market estimate of 0.55 US dollars.
Coca-Cola expects the year-on-year growth rate of organic revenue in 2024 to be around 10%, higher than the previously forecasted 9%-10%.
Maintain the forecast of 5%-6% growth in comparable earnings per share this year.
"Our business continues to demonstrate resilience in a constantly changing external environment," said James Quincey, Chairman and CEO of The Coca-Cola Company in the financial report announcement. "We are encouraged by our performance so far this year, with our system able to manage short-term challenges while also focusing on long-term growth opportunities."
After the financial report was released, Coca-Cola's pre-market trading on the US stock market fell by more than 2%. So far this year, Coca-Cola's stock price has risen by over 16%.
Coca-Cola will also provide a complete performance guidance for 2025 when announcing the fourth-quarter financial report. However, in the financial report statement released on Wednesday, the company expects exchange rates to impact next year's performance. Coca-Cola expects next year's comparable revenue to face low single-digit negative impact, and earnings per share to face mid-single-digit negative impact.
Third-quarter quantity reduction and price increase
Due to weak international market demand, Coca-Cola's third-quarter unit case sales volume decreased by 1% year-on-year.
Coca-Cola's unit case sales volume in Europe, Middle East, Africa, and Asia-Pacific regions all decreased by 2%. Meanwhile, the unit case sales volume in the North American market remained relatively stable. Sales of water, sports, coffee, and tea products declined, while carbonated water, fruit juice, dairy products, plant-based beverages, and carbonated drinks showed growth.
By department, the sales volume of carbonated water and soda water like Coca-Cola Sprite remained flat this quarter; while the sales volume of fruit juice, dairy products, and plant-based beverages departments decreased by 3%; the sales volume of water, sports, coffee, and tea departments decreased by 4%, with bottled water sales volume declining by 6%.
Coca-Cola stated that this quarter the company's product prices increased by 10% (exceeding Wall Street's expected 6.51%), with around 4% of the increase coming from severely inflationary markets like Argentina.
Editor/rice
