KEY POINTS
- Coca-Cola earnings and revenue topped Wall Street’s estimates, but the company’s 2022 forecast was weaker than expected.
- Rival PepsiCo similarly warned investors about rising costs for packaging and transportation.
- Coke’s organic revenue climbed 9% in the quarter.
Coca-Cola on Thursday reported quarterly earnings and revenue that beat analysts’ expectations as consumers drank more of the company’s products away from home, topping pre-pandemic levels for the first time.
But the company issued a weaker-than-expected outlook, predicting that higher inflation would continue to weigh on its profits throughout 2022. Rival PepsiCo similarly warned investors about rising costs for packaging and transportation.
Shares of Coke closed Thursday, up 0.5% at $61.37.
Here’s what the company reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 45 cents adjusted vs. 41 cents expected
- Revenue: $9.46 billion vs. $8.96 billion expected
The beverage giant reported net income of $2.41 billion, or 56 cents per share, for the quarter, up from $1.46 billion, or 34 cents per share, a year earlier.
Excluding items, Coke earned 45 cents per share, beating the 41 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 10% to $9.46 billion, topping expectations of $8.96 billion. The quarter’s revenue was hurt by six fewer days than the prior year and the timing of concentrate shipments, according to the company.
Organic revenue, which strips out the impact of acquisitions and divestitures, jumped 9% in the quarter. Unit case volume also rose 9%.
Coke’s sparkling soft drinks segment, which includes its namesake soda, saw volume grow 8% in the quarter. Coke Zero Sugar saw double-digit growth.
Volume of nutrition, juice, dairy and plant-based beverages climbed 11%. The segment includes Simply, which is its second-largest brand by revenue. The company is working with Molson Coors to release Simply Spiked Lemonade this summer, capitalizing on the juice and plant-based milk brand’s popularity.
Coke’s hydration, sports drinks, coffee and tea division saw 12% volume growth in the quarter. Sports drinks saw the highest spike in volume changes, driven by its recent Bodyarmor acquisition. Coffee saw the second-highest surge, growing 17% as Coke reopened Costa cafes in the United Kingdom.
During the fourth quarter, Coke bought full control of Bodyarmor for $5.6 billion, helping the company gain market share in the sports drink category. Coke bottlers will distribute the product in the U.S., while Bodyarmor will be managed as a separate business within Coke’s North American division.
For 2022, Coke is expecting comparable earnings per share growth of 5% to 6%, while Wall Street analysts were forecasting 6.1% growth. It expects higher commodity costs to hit earnings by mid-single digits. The company is also predicting organic revenue growth of 7% to 8% for the full year.
“While we are seeing some impacts from the omicron variant through the first few weeks of the year, we’re not seeing the same level of disruption as previous waves and our system is better equipped,” CEO James Quincey said on a conference call.
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