Coca-Cola Co. reported stronger-than-expected third-quarter earnings Tuesday, lifted by resilient global demand for its zero-sugar beverages and Fairlife dairy products, even as its flagship Coke line continued to feel the effects of changing consumer habits and lingering reputational challenges.
The world's largest beverage maker posted quarterly revenue of $12.46 billion, surpassing Wall Street's consensus estimate of $12.39 billion, according to LSEG data. Adjusted earnings came in at 82 cents per share, ahead of forecasts for 78 cents, while organic revenue rose 6%. Coca-Cola shares climbed more than 2% in premarket trading.
"While the overall environment has continued to be challenging, we've stayed flexible - adapting plans where needed and investing for growth," Chairman and CEO James Quincey said. He added that by offering "choice" across its "total beverage portfolio" and "leveraging our franchise model's unique strengths," the company was able to strengthen its "leadership position."
Coca-Cola maintained its full-year sales and profit guidance, projecting adjusted earnings growth of about 3% and net revenue growth of 1%-2%. The results continued a streak of strong showings from major consumer brands, following a similar beat from PepsiCo, which also credited growth in smaller, more affordable packaging.
Global volume rose 1% in the quarter, topping expectations of 0.75%, but trailing the 4% gain seen a year earlier. Regional performance was mixed: unit case volume rose 4% in Europe, the Middle East and Africa, was flat in North and Latin America, and fell 1% in Asia-Pacific. The standout performer was Coca-Cola Zero Sugar, which grew 14% globally.
Other segments showed softness. Juice, plant-based beverages and value-added dairy products fell 3% in volume, while water rose 3%. The company's sports drink business gained 3% globally, driven by growth in North America.
CFO John Murphy said that growing interest in lower-calorie drinks was affecting the company's core Coke brand. "Affordability and value are really important and we understand that," Murphy told Reuters. "We know that it's important that we find the right packages at the right price point to keep that consumer in our base."
Coca-Cola plans to launch a cane sugar version of its trademark soda in the U.S. this fall and introduce 7.5-ounce single-serve cans priced below $2 at convenience stores to attract price-sensitive consumers.
Murphy acknowledged that the company is still recovering from what he called a "significant impact" from a boycott earlier this year after a viral video falsely claimed the company had reported Latino employees to U.S. immigration authorities.
