Coca-Cola on Wednesday reported fiscal third-quarter earnings and sales that topped analysts' estimates, prompting the beverage giant to hike its annual outlook again.
Chairman and CEO James Quincey said in prepared remarks that Coke is emerging from the coronavirus pandemic as a stronger business. It's seeing a recovery in its away-from-home channels, like restaurants and movie theaters, which had cratered this time last year.
Coke shares rose around 3% in premarket trading on the news.
Here's how the company did compared with what Wall Street analysts surveyed by Refinitiv were expecting:
- Earnings per share:Â 65 cents adjusted vs. 58 cents expected
- Revenue: $10.04 billion vs. $9.75 billion expected
Coke's net income for the three-month period ended Oct. 1 grew to $2.5 billion, or 57 cents per share, compared with $1.7 billion, or 40 cents a share, a year earlier. Excluding one-time items, the company earned 65 cents per share, topping estimates for 58 cents.
Net sales rose 16% to $10.04 billion from $8.65 billion a year earlier. That beat expectations for $9.75 billion. Organic revenue, which excludes the impact of acquisitions, divestitures and foreign currency, climbed 14%. Unit case volume, which strips out the impact of currency and price changes, was up 6% and came in ahead of 2019 levels.
Coke's sparkling soft drinks unit, which includes its namesake soda, saw volume increase by 6% in the quarter. The nutrition, juice, dairy and plant-based beverage business reported volume growth of 12%, in part thanks to strong sales of Minute Maid. The hydration, sports, coffee and tea segment saw volume growth of 6%. Coffee grew 19%, driven by the ongoing reopening of Costa cafes in the United Kingdom.
Coke said it saw strength in markets where coronavirus-related uncertainty has been abating.
Volume growth was up 8% in its Europe, Middle East and Africa region, led by markets including Russia, Nigeria and Turkey. Unit case volume in Latin America also rose 8%. Volume growth climbed 4% in North America and was up 3% in Asia-Pacific.
Part of what is driving Coke's comeback is a significant increase in its marketing and advertising spending. The company said it nearly doubled its marketing budget from a year earlier, when Coke slashed costs to shore up cash. Coke also debuted an ad campaign titled "Real Magic" for its trademark soda brand, its first in five years.
The beverage giant has also hiked prices to counter some of the impact from rising commodity and freight costs.
It now sees full-year organic revenue growth of 13% to 14%, an increase from its previous range of up 12% to 14%. It expects adjusted earnings per share to increase 15% to 17%, higher than its previous range of up 13% to 15%.
Coke's stock has dropped nearly 1% year to date. The company has a market value of $235 billion. Quincey said on CNBC's "Squawk on the Street" that the company's away-from-home business has likely weighed on its stock. While other staples companies are more focused on at-home occasions, only about half of Coke's revenue comes from those purchases.
Find the full earnings press release from Coke here.
—CNBC's Amelia Lucas contributed to this report.
