Coca Cola loses in pre-opening trade despite outperforming earnings expectations 📊

Coca Cola (KO.US) released its 3Q24 results, which came in better than expected. The company reported stronger revenue, better profitability, and higher adjusted organic revenue growth. The company reiterated forecasts for the full year 2024. Despite better than expected results stocks are declining in pre-market trading. 

Coca Cola posted revenue of $11.9 billion (flat y/y), which turned out to be a higher reading than consensus expectations. Stronger sales results also translated into higher earnings per share, which rose to $0.77 (+4% y/y) against forecasts for earnings per share to remain flat. Adjusted organic revenues also rose more strongly to forecasts and were 9% higher than in the same period a year earlier. 

Investors may be concerned about the deterioration in unit volume, which fell -1% against forecasts of almost 0.4% growth and 2% growth a year earlier. The company reported the largest volume declines in nutrition, juice, dairy and vegetable beverages, as well as in water, sports drinks, coffee and tea. Only in terms of volumes did the carbonated beverages segment record an increase, although even here the dynamics leave much to be desired. 

The company left forecasts at a similar level, further seeing 5-6% year-on-year growth in adjusted earnings per share. A one-time drag on earnings-per-share growth momentum may come in 4Q24, affected by foreign exchange differences and the impact of acquisitions. 

In pre-market trading, Coca Cola is losing nearly -2%. Source: xStation

FINANCIAL RESULTS 3Q24:

• Revenue $11.9 billion (flat y/y), estimates: $11.6 billion 
• Comparable earnings per share: $0.77 vs. $0.74 y/y, estimates: $0.74 
• Unit case volume -1% vs. +2% y/y, estimate +0.42%
  • Nutrition, juice, dairy and plant-based beverages - unit case volume -3%
  • Sparkling soft drinks - unit case volume: -1%, estimate +0.42%
  • Water, sports drinks, coffee and tea - unit case volume -4%
• Price/mix +10%, estimate +6.51%
• Change in concentrate sales -2%, estimate -0.07%
• Adjusted organic revenue +9%, estimate +6.3%