Coca-Cola Q4 revenues beat expectations
By Michele Maatouk
Date: Tuesday 13 Feb 2024
(Sharecast News) - Coca-Cola reported better-than-expected fourth-quarter revenue on Tuesday as it benefited from higher prices and volumes.
Net revenue rose 7% to $10.8bn, coming in above consensus expectations of $10.7bn. Earnings per share declined 2% 46 cents, while comparable EPS grew 10% to 49 cents.
The drinks maker said unit case volume grew 2% for the quarter. Developed markets were even, with growth in Mexico and Germany offset by declines in the US and Chile.
Meanwhile, average selling prices were up 9%.
For full year 2024, the company expects to deliver organic revenue growth of 6% to 7%, while comparable earnings per share are expected to rise 4% to 5%.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "Coca-Cola's fourth-quarter results showcased why it's still the top dog in the soft drink industry. With 61 years of annual dividend increases, investors would be forgiven for thinking this is a boring mature company.
"But double-digit revenue and profit growth suggest otherwise and highlight the fact that this dividend king isn't resting on its laurels. The revenue uplift came from a healthy mix of both price and volume, at a time when many of its peers are seeing volumes flatten or even decline.
"The real secret formula to Coca-Cola's success doesn't lie in a vault. Instead, it lies in successfully aligning its interests with those of its bottling partners. The group does this by having a roughly 20-25% stake in its most important bottlers, with a significant portion of the remaining shares typically owned by a single family. This ownership structure helps to align focus on long-term growth, with skin-in-the-game family owners naturally being more patient than your typical public investors."
He said that healthy free cash flows and falling net debt levels mean there could be room for increased share buybacks this year.
"Some of these funds could also be spent on acquiring new brands as a route to boost revenue growth. Although, getting the right brand at the right price is a difficult task. And even if Coca-Cola pulls it off, several years of investment would likely be needed to ramp up production and elevate brand awareness amongst consumers."
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