Coca-Cola Surpasses Earnings Expectations as Higher-Priced Beverages Drive Sales

Coca-Cola’s fourth-quarter earnings exceeded expectations, as the company’s strategy of encouraging consumers to buy higher-priced beverages fueled an unexpected rise in sales volume. The strong performance sent shares higher in premarket U.S. trading on Tuesday.

The beverage giant (NYSE: KO) has introduced slimmer 12-ounce cans in the U.S. to boost sales, catering to cost-conscious consumers who have been more selective with their spending on soft drinks. Analysts credit this approach with sustaining demand for Coca-Cola’s premium offerings, including sodas and juices.

For the quarter ending December 31, North America unit case volume grew by 1%, driven by increased demand for sparkling flavors, juice, value-added dairy products, plant-based drinks, and Coca-Cola’s flagship brand. Reported net revenues in the region surged 16%.

However, this strength was tempered by stagnant volumes in Europe, the Middle East, and Africa, with the company previously warning that conflicts in the Middle East had disrupted supply chains.

On a global scale, unit case volume rose by 2%, defying expectations of a 0.21% decline. China, despite struggling with weak consumer demand amid a sluggish post-pandemic recovery, contributed significantly to the growth.

Comparable earnings per share for the quarter climbed 12% year-over-year to $0.55, surpassing Bloomberg consensus estimates of $0.52.

Looking ahead to fiscal 2025, Coca-Cola forecasts organic revenue growth of 5% to 6%, slightly below market projections of 7.09%. Comparable earnings per share are expected to rise by 2% to 3% from $2.88 in 2024, setting a range of $2.94 to $2.97—closely aligned with Wall Street’s expectation of $2.95.

Earlier this month, rival PepsiCo (NASDAQ: PEP) issued a weaker-than-expected annual forecast, citing subdued U.S. consumer spending and intensified promotional activity.