Coca-Cola's first-quarter profit and revenue beat analysts' consensus forecasts

Coca-Cola (NYSE: ) reported a strong start to 2024, with first-quarter profit and revenue beating analysts' expectations. The beverage giant reported adjusted earnings per share (EPS) of $0.72, beating the consensus estimate of $0.70. Revenue for the quarter also beat expectations, reaching $11.3 billion versus expectations of $11.02 billion.

The company's net income grew 3% compared with the same period last year, while organic revenue, which excludes the impact of currency fluctuations, acquisitions and divestitures, grew an impressive 11%. This increase was attributed to a 13% increase in price/product mix, despite a 2% decline in concentrate volumes. The company's global unit case volume also experienced modest growth of 1%. However, Coca-Cola's operating income fell significantly by 36%, mainly due to expenses related to the fairlife and BODYARMOR trademarks and currency headwinds.

Chairman and CEO James Quincey expressed confidence in the company's trajectory, saying: “We are encouraged to start 2024, delivering another quarter of sales, revenue and revenue against a dynamic backdrop. Profitable growth. The company's strategic marketing initiatives, such as the launch of the “Coca-Cola Happy Tears Zero Sugar” and “Coca-Cola Food Logo” campaigns, played an important role in driving sales growth and market share growth.

The stock reacted positively to the earnings report, initially rising 1.55%. However, the index is currently flat as of 10:33 a.m. ET.

Looking forward, Coca-Cola updated its full-year guidance for 2024 and expects organic revenue to grow by 8% to 9%. The company expects comparable net income to face currency headwinds of 4% to 5% and comparable earnings per share growth to face currency headwinds of 7% to 8%. Despite these challenges, the company expects comparable currency-neutral earnings per share to grow 11% to 13% and comparable EPS to grow 4% to 5% compared to the $2.69 reported in 2023.

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Coca-Cola expects that in the second quarter of 2024, Coca-Cola's comparable net income will face currency resistance of 6%, and comparable earnings per share growth will face currency resistance of 8% to 9%. The company remains committed to creating value for shareholders and expects full-year free cash flow to be approximately $9.2 billion.

Quincey concluded with a forward-looking statement: “We believe our global system is well-positioned for continued success thanks to the right strategy, clear alliances, strong product portfolio and strong execution. “

Truist analysts responded to the report saying they expect the stock to open flat in a solid quarter, while guidance will remain relatively unchanged after factoring in FX.

Morgan Stanley analysts said they believed the measures were “strong across the income statement lines,” but with no change to fiscal-year earnings per share guidance, they expected a muted stock market reaction.

Goldman Sachs analysts said: “While we think investors expected strong first-quarter results from KO, especially given PEP's better-than-expected results last week, we were surprised by the magnitude of its gains despite fewer selling days this quarter. .

“We are impressed with KO's revenue momentum and execution in a challenging environment as it further positions itself for healthy, sustainable growth. That said, given KO's relationship with the IRS and potential tax liability, ” they added.

Analysts at Jefferies noted that earnings growth was driven by broad-based revenue strength and margin expansion. The momentum “is expected to continue to lead to higher organic outlook, although increasing foreign exchange headwinds keep bottom-line expectations unchanged,” the company said.

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