Coca-Cola Co. (KO) posted modestly better-than-expected fourth quarter sales Tuesday, while forecasting solid near-term profits, as consumers continue to take price increases in the food and drinks sector.
Coca-Cola said adjusted non-GAAP earnings for the three months ending in December were pegged at 45 cents per share, largely flat to the same period last year and essentially matching the Street consensus forecast.
Group revenues, Coca-Cola said, rose 6.65% to $10.1 billion, a figure that topped analysts' estimates of a $10.02 billion tally. Case volumes, however, were down 1% and the group's operating margin expanded by 160 basis points to 22.7%.
Looking into the 2023 financial year, Coca-Cola said it sees revenue growth of between 7% and 8% and adjusted earnings growth of between 4% to 5% from 2021 levels.
“While 2022 brought many challenges, we are proud of our overall results in a dynamic operating environment,” said CEO James Quincey. “As we begin 2023, we continue to invest in our capabilities and strengthen alignment with our bottling partners to maintain flexibility"
"We are keeping consumers at the center of our innovation and marketing investments, while also leveraging our expertise in revenue growth management and execution," he added. "Our growth culture is leading to new approaches, more experimentation, and improved agility to drive growth and value for our stakeholders.”
Coca-Cola shares were marked 05% lower in early Tuesday trading immediately following the earnings release to change hands at $60.33 each.
Earlier this month, Coca-Cola's main drinks rival, PepsiCo PEP, topped Street earnings forecasts but suggested that consumers are starting to feel the impact of relentless price hikes.
CFO Hugh Johnston, in fact, said Pepsi would likely not raise prices this year, telling Reuters that "we have most of our increases already in place".
PepsiCo said core earnings for the three months ended in December were pegged at $1.67 per share, up 9.1% from the year-earlier period and 2 cents ahead of the Wall Street consensus forecast, with overall revenues rising 10.9% to $27.99 billion.
Looking into the current financial year, PepsiCo sees core earnings of around $7.20 per share, around 8 cents shy of the Refinitiv forecast, with organic sales growth of around 6%.
