Higher Prices Fuel Coca-Cola Revenue Growth in the Fourth Quarter

In a report released on Tuesday, Coca-Cola said that its quarterly revenue had exceeded analysts' expectations, largely as a result of higher prices on its drinks.

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There is no doubt that the higher prices for Coke products like Simply Orange Juice and Fairlife Milk have hurt the demand for those products. It has been reported by Coca-Cola that its fourth-quarter unit case volume, which strips out the impact of currency and price changes, dropped 1%.

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A 1% gain was recorded in premarket trading for the company's shares.

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Using Refinitiv's survey of analysts, here is what the company reported, compared with what Wall Street expected, based on a survey of analysts by the company:

• Earnings per share: adjusted 45 cents compared to an expected 45 cents
• Revenue: $10.13 billion compared to an expected $10.02 billion

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In the fourth quarter, Coca-Cola reported a net income of $2.03 billion attributable to the company, or 47 cents per share, a decline from $2.41 billion attributable to the company, or 56 cents per share, in the previous year.

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Aside from an impairment charge associated with Coke's Russian business and other items, the company earned 45 cents per share before the impairment charge.

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With net sales rising 7% to $10.13 billion, this was driven by a 12% increase in pricing and a more expensive mix of drinks that were sold.

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The volume of unit cases declined by 5% in Europe, the Middle East, and Africa, while North America's volume remained flat. James Quincey, the CEO of the company, said last quarter that consumers in Europe were changing their behavior as a result of high inflation.

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It was a flat quarter for the sparkling soft drinks segment as well as the division for water, sports, coffee, and tea at Coke, although there were a few bright spots in the quarter. The company expanded its Costa brand, which resulted in a 9% growth in Coke Zero Sugar's volume, while its coffee business saw an 11% increase in volume as a result of its expansion.

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Coke's juice, value-added dairy products, and plant-based beverages segment, which saw its sales decline by 7% in the quarter, was the weakest spot in the quarter, with its volume falling by 7%. There has been a significant impact on the company's Russian business division as a result of the suspension of its activities.

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For 2023, Coke expects comparable revenue growth of between 3% and 5%, as well as comparable earnings per share growth of between 4% and 5%. As of the end of February, Wall Street expected a 3.9% increase in revenue for the year and a 3% increase in earnings per share.