Coca-Cola Raises Full-Year Outlook Following Stronger-Than-Expected Q3 Earnings

Strong third-quarter revenue driven by higher volumes across Latin America and Asia Pacific amid price hikes; anticipates 7-8% EPS growth and 10-11% revenue growth for the year.

Coca-Cola reported a stronger-than-expected Q3 earnings with a net income of $3.09 billion, surpassing consensus estimates of $0.69 per adjusted share with $0.74. This represents a 7% increase from the same quarter last year.
Unit case volume, which measures consumer purchase of beverages, grew by 2% this quarter. This was driven by higher volumes in Latin America and Asia Pacific. Particularly, purchases for Coke Zero increased by 3%, suggesting strong growth in North and Latin America.
Despite price hikes, consumers continued to buy soft drinks and other beverages, highlighting a robust consumer market that has been sustaining the U.S. economy despite persistent high inflation and Federal Reserve's rate hikes. As a consumer staples company, Coca-Cola is potentially more resilient against economic downturns than discretionary goods companies.
Coca-Cola raised its full-year EPS guidance, forecasting a rise of 10% to 11% in revenue. This is an upgrade from the previous forecast of 8% to 9%. The increase reflects the stronger-than-expected results of Q3.
Shares of Coca-Cola saw an increase of nearly 3% in early trading, despite a year-to-date decline of over 10%. Analysts from Bank of America expect that strong organic sales growth and effective pricing model could drive Coca-Cola's share price to rise to $60, which is about 8% premium from its current price.