Coca-Cola Q4 Profit Down 16%, But Meets Estimates

Beverages giant Coca-Cola Co. (KO) reported Tuesday a profit for the fourth quarter that declined 16 percent from last year, reflecting steeply lower other income and higher interest expense, despite a 7 percent revenue growth.

Adjusted earnings per share met analysts’ expectations, while quarterly revenues topped it. The company also initiated its adjusted earnings and organic revenue growth outlook for the full-year 2023.

For the fourth quarter, net income attributable to shareowners of Coca-Cola declined to $2.03 billion or $0.47 per share from $2.41 billion or $0.56 per share in the prior-year quarter. Excluding items, comparable earnings per share were $0.45, compared to last year’s $0.45.

On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $0.45 per share for the quarter. Analysts’ estimates typically exclude special items.

Net operating revenues for the quarter increased 7 percent to $10.13 billion from $9.46 billion in the same quarter last year, driven by a 12 percent growth in price/mix and 2 percent growth in concentrate sales. The Street expected revenues of $10.02 billion for the quarter.

Organic revenues also grew 15 percent in the quarter. Global unit case volume edged down 1 percent as strong growth in Brazil, India, Great Britain and Mexico was more than offset by the suspension of business in Russia.

The company gained value share in total nonalcoholic ready-to-drink (NARTD) beverages, which included share gains in both at-home and away-from-home channels.

Developing and emerging markets declined in low single digits, unfavorably impacted by the suspension of business in Russia, partially offset by strong growth in India and Brazil.

Looking ahead to the first quarter, Coca-Cola projects comparable net revenues on an adjusted basis to be impacted 5 to 6 percent currency headwind based on the current rates and including the impact of hedged positions. Comparable earnings per share are expected to include a 6 to 7 percent currency headwind.

For fiscal 2023, the company now projects comparable earnings per share growth of 4 to 5 percent compared to $2.48 per share in 2022, with a 3 to 4 percent currency tailwind. It also projects organic revenue growth of 7 to 8 percent, with a 2 to 3 percent currency tailwind.

The Street is looking for earnings of $2.56 per share on revenue growth of 3.9 percent to $44.48 billion for the year.

“As we begin 2023, we continue to invest in our capabilities and strengthen alignment with our bottling partners to maintain flexibility. We are keeping consumers at the center of our innovation and marketing investments, while also leveraging our expertise in revenue growth management and execution,” said James Quincey, Chairman and CEO.

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