Coca-Cola results beat estimates on price hikes, demand surge
[ATLANTA] Coca-Cola on Tuesday (Apr 29) reported better-than-expected revenue and profit for the first quarter, as the beverage giant benefits from price hikes and enjoys strong demand for its sodas, juices and milk offering Fairlife.
The Sprite and Fanta maker also maintained its full-year organic revenue and comparable profit forecasts, unlike PepsiCo and Procter & Gamble that lowered their annual expectations as the global trade war triggered by steep US tariffs threatened to push up costs for American companies.
'(Coca-Cola's) operations are primarily local, however, it is subject to global trade dynamics which may impact certain components of the company's cost structure across its markets,' it said in a statement.
'At this time, the company expects the impact to be manageable.'
In the last quarter, Coca-Cola had underlined strategies to offer affordable packaging options and plans to use plastic bottles to mitigate the impact from 25 per cent tariffs on aluminum imports.
'This morning's print reaffirms our confidence in Coca-Cola's fundamentals despite a difficult macroeconomic backdrop,' RBC Capital analyst Nik Modi said.
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'Coca-Cola reiterated top- and bottom-line guidance, which should be viewed as favourable in this environment,' he said.
Shares of Coca-Cola rose 1.2 per cent in premarket trading.
Rival PepsiCo last week called out subdued consumer spending, but demand for Coca-Cola's slightly pricey products has so far remained stable, helping boost sales growth despite price hikes in highly inflationary markets such as Argentina and Latin America.
Its first-quarter overall average selling prices rose 5 per cent, while unit case volumes increased 2 per cent.
Still, volumes in its North America market fell 3 per cent, mostly due to a slowdown in demand for its legacy brands such as Coca-Cola and Sprite, as well as coffee.
In an attempt to boost demand in the region, the company has been betting on its portfolio of energy drinks and prebiotic sodas by launching new items such as Simply Pop.
Its quarterly revenue fell marginally to US$11.22 billion, compared with expectations of a 0.84 per cent fall to US$11.14 billion, according to data compiled by LSEG.
Excluding items, the company earned 73 US cents per share, compared with estimates of 71 US cents. REUTERS
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