Takeaways
- Coca -Cola (KO) beat revenue and profit estimates for the third quarter as consumers increased their purchases of soft drinks and other beverages despite the company's price hikes.
- The soft drink giant's net income was $3.09 billion, or 74 cents per adjusted share. That's up 7% from the same quarter last year and above consensus estimates of 69 cents per share.
- Unit case volume, which measures the amount of soda and other beverages consumers purchase, increased 2% from the previous quarter, driven by higher volumes in Latin America and Asia Pacific.
- Coca-Cola increased its total case volume. guidance for the year, and now expects adjusted EPS growth in the range of 7% to 8% this year, up from the 5% to 6% expected after the second quarter. /li>
Coca-Cola (KO) beat estimates for both revenue and net income for the third quarter as consumers increased their purchases of soft drinks and other beverages despite price hikes in the ;business.
The soft drink giant's net income was $3.09 billion, or 74 cents per adjusted share. That's up 7% from the same quarter last year and above consensus estimates of 69 cents per share. Revenue came in at just under $12 billion, up 8% from last year and also above the $11.4 billion estimate.
Unit case volume, which measures the amount of soda and other beverages consumers buy, increased 2% from the previous quarter, driven by higher purchases in Latin America and Asia-Pacific. Purchase volumes of Coke Zero, the sugar-free version of Coca-Cola launched in 2005, increased by 3% thanks to strong growth in North America and Latin America.
“We had an overall strong quarter and we are raising our revenue and net income guidance for the full year in light of our year-to-date performance. year,” he said. said James Quincey, Chairman and CEO of The Coca-Cola Company.
Consumers continued to spend for soft drinks and other beverages despite Coca-Cola's price hikes in recent quarters, intended to offset the effects of higher inflation.
This speaks to the strength of American consumers, who have continued to spend despite continued high inflation and rate hikes from the Federal Reserve. Robust consumer spending, which accounts for more than two-thirds of U.S. gross domestic product (GDP), is one reason the United States has been able to avoid a recession so far this year.
As a company selling consumer staples, Coca-Cola may be better prepared to weather an economic downturn than companies focused on selling discretionary goods. A slowdown in discretionary spending this year has affected big retailers like Target (TGT) and Walmart (WMT).
Coca-Cola raised its full one-year EPS guidance on stronger-than-expected earnings. Revenue is expected to grow 10% to 11%, up from the previous range of 8% to 9%.
Shares of Coca-Cola rose nearly 3% in early trading Tuesday. However, they have so far fallen more than 10% in 2023. Bank of America analysts said Coca-Cola shares could hit $60, a premium of about 8% to their price on Tuesday, as the company benefits from strong organic sales growth and an efficient pricing model.
TradingView
Ozempic fears could be exaggerated
The rush of news on Ozempic, a drug against diabetes, which has gained popularity thanks to its off-label use to help lose weight, has caused a recent sell-off. of various food and beverage stocks, including Coca-Cola.
The fear is that if #39;is used If the use of Ozempic for this purpose expands, consumers will have less appetite for products made by these companies. However, RBC Capital Markets suggests that this concern is unfounded and that the full impact of Ozempic and other GLP-1 drugs will not be felt for many years.
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Source: investopedia.com