Food & Beverage

Coca-Cola beats earnings estimates, but net revenues fall

Coca-Cola posted earnings on Wednesday that beat analysts' estimates, but blamed strong international headwinds and political uncertainty for lower revenue.

Net sales in the third quarter fell 7 percent from a year earlier to $10.6 billion, but were higher than Wall Street estimates of $10.5 billion. Coke's better-than-expected revenue was helped by higher prices for sodas and a strong demand for water and sports drinks in North America.

Coke reported earnings of 49 cents for the quarter, excluding items, beating the average analyst forecast of 48 cents from Thomson Reuters. This makes seven-straight quarters that the company has surpassed Wall Street's expectations.

The Atlanta beverage company said it saw organic revenue growth of 3 percent, falling short of analysts' estimates of 3.2 percent. Organic revenue excludes foreign currency effects and the impact of acquisitions and divestitures.

Coke said organic sales growth rose 4 percent so far this year, and margins expanded more than 50 basis points.

The company maintained its outlook for 3 percent growth in organic revenue for the full year.

"We continued to see solid revenue results in our developed markets with 2 percent unit case volume growth and a continued focus on price realization," Muhtar Kent, Coca-Cola's chairman and CEO, said in a statement. "The United States, Japan and Western Europe delivered standout performance underpinned by innovation and world-class marketing."

Globally, Kent noted that the company gained share in nonalcoholic ready-to-drink beverages for the 37th consecutive quarter.

Closer to home, Coke said it gained share in nonalcoholic ready-to-drink beverages for the 26th consecutive quarter. While sparkling beverages were flat for the quarter, growth in Sprite, Fanta and energy drinks helped to offset a decline in Diet Coke. Coca-Cola Zero grew in the low single digits.

Still beverage volume grew 2 percent in North America, driven by water and sports drinks, said the company.

Coca-Cola announced Wednesday that it secured six new franchising agreements with bottlers in an effort to refranchise its company-owned bottling operations.

The company said it remains on track to accomplish its refinancing by the end of 2017.