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Key Takeaways From Coca-Cola's 3rd-Quarter Results

Coca-Cola Co. (NYSE:KO) released its third-quarter results before the opening bell on Oct. 18. While earnings were in line with Wall Street's estimates, revenue surpassed expectations as consumers indulged in new products like energy drinks and Coca-Cola Plus Coffee.

Snapshot of the quarter

The Atlanta-based company posted earnings of 56 cents per share, matching forecasts set by analysts. Revenue grew 8% from the prior-year quarter $9.5 billion. Analysts were anticipating revenue of $9.4 billion.


Higher prices coupled with robust demand for expensive drinks helped boost the company's organic revenue, which increased 5% in the reported quarter.

"Our performance gives us confidence that our strategies are taking hold with our consumers, customers and system," CEO James Quincey said."We are positioning the company to create a better shared future for all of our stakeholders by delivering on our vision and growing sustainably."

Segment performance

Total units case volume increased 2% in the reported quarter on the back strong growth in the developing as well as emerging markets. The North American division recorded higher demand for Coca-Cola Zero Sugar, which aided volume.

Geographically, sales climbed 1% in North America, 4% in Latin America and 3% in the Asia-Pacific segment. Revenue in the Europe, Middle East and Africa segment was flat compared to the prior-year quarter. Global Ventures' revenue surged a mammoth 243% from the aquisition of Costa, a British coffee chain.

Organic revenues increased across all regions as a result of regular innovation and revenue growth programs within sparkling soft drinks, along with solid pricing and mix. Organic sales grew 3% in both North America and Asia Pacific, 12% in Latin America, 4% in the EMEA region and 14% in Global Ventures.

Looking ahead

In order to address the changing and diverse tastes of consumers, the company announced it will roll out Coca-Cola Energy (which is already available in 25 countries) in the U.S. with zero-calorie options in January 2020.

Financial forecast

For full-year 2019, Coca-Cola anticipates organic growth of 5%. The company also forecasted for comparable earnings growth in the range of a 1% increase to a 1% decrease. Further, it guided for comparable currency neutral operating income to surge 12% to 13% over the same period. While cash from operations is expected to be at least $8.8 billion, the capital expenditure is projected to be around $2.2 billion.

Disclosure: I do not hold any positions in the stocks mentioned.

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This article first appeared on GuruFocus.