Giant beverage company Coca-Cola in its quarterly report, witnessed a surge in revenue in the fourth quarter, beating analysts’ expectations.
The company whose share price rose 1% in premarket trading, disclosed that its recent increase in revenue was as a result of increase in the prices of its drinks.
Coca-Cola reportedly raised prices to offset inflation and said it didn’t affect demand for its drinks during the fourth quarter. Pricing and the mix of beverages contributed 12% to revenue growth, while concentrate sales rose 2%.
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But those higher prices have hurt demand for coke products like simply Orange Juice and Fairlife Milk. Coke revealed that its unit case volume, which strips out the impact of currency and price changes, fell 1% in its fourth quarter.
The Zacks Consensus Estimate for the company’s fourth-quarter revenue was pegged at $10.01 billion, suggesting 5.7% growth from the prior-year quarter’s reported figure.
The estimate for the company’s 2022 revenue was pegged at $42.9 billion, suggesting 10.9% growth from the prior-year quarter’s reported figure. For 2022 earnings, the consensus mark for earnings was pegged at $2.48, suggesting growth of 6.9% from the year-ago quarter’s reported figure.
Coca-Cola reported 45 cents earnings per share, the same as Wall Street expectations. The company’s revenue rose to 7%, reporting a revenue of $10.13 billion, compared to the $10.02 billion Wall Street expectations.
The beverage giant reported fourth-quarter net income attributable to the company of $2.03 billion, or 47 cents per share, down from $2.41 billion or 56 years per share a year earlier.
Coca-Cola said its net income fell 16% to $2 billion for the October-December period, partly because the strong U.S. dollar impacted overseas profits.
Unit case volume was flat in North America and slipped 5% in its Europe, Middle East, and Africa segment. Chief Executive Officer of the company James Quincey said last quarter that European consumers were changing their behavior in response to soaring inflation.
Both Coke’s sparkling soft drinks segment and its water, sports, coffee, and tea division reported flat volume for the quarter, although there were some bright spots. Coke Zero Sugar’s volume climbed by 9%, and its coffee business saw a volume increase of 11% as the company expanded its Costa brand.
The weakest spot was Coke’s juice, value-added dairy, and plant-based beverages segment, which saw its volume shrink by 7% in the quarter. The company said the suspension of its Russian business weighed on the division.
For 2023, Coke projects comparable revenue growth of 3% to 5% and comparable earnings per share growth of 4% to 5%. Wall Street was forecasting revenue growth of 3.9% and earnings per share growth of 3% for the year.