Zero Sugar Soft Drinks And Smaller Cans Drive Coca-Cola Revenue Beat

By Donna Ahern
Zero Sugar Soft Drinks And Smaller Cans Drive Coca-Cola Revenue Beat

Coca-Cola Co beat Wall Street estimates for quarterly revenue on Friday as customers took to smaller-sized cans of its soft drinks, including Coca-Cola Zero Sugar, prompting the beverage maker to give an upbeat forecast for 2019.

Faltering demand for sugary drinks has forced the world's two largest beverage makers, Coca-Cola and PepsiCo Inc, to roll out low-sugar drinks, while diversifying into coffee, tea and bottled waters to boost sales.

Coca-Cola has also been rolling out new products such as Coca-Cola Plus Coffee, a blend of its trademark soda with coffee in more than 20 markets, as well as drinks in small but high-margin packs that are appealing to consumers who are turning more health conscious.

Energy Drink

The beverage maker is launching Coca-Cola Energy, its first Coke-branded energy drink, in the United States, and has expanded its coffee business with the multi-billion dollar purchase of Britain-based Costa Coffee last year.

ADVERTISEMENT

Volume in sparkling soft drinks rose 2% in the quarter, driven by double-digit percentage growth in Coca-Cola Zero Sugar and Sprite in North America.

Strong growth was also seen in its smaller package drinks, led by double-digit growth in 7.5-ounce mini-cans.

Organic revenue, that excludes the impact of currency fluctuations, acquisitions and divestitures, climbed 5% during the quarter, above the average analyst estimate of 4.3%, according to five analysts polled by Refinitiv.

Shares of the Atlanta-based company rose 2% before the opening bell, adding to the 14% they have gained this year.

"We were very impressed with Coca-Cola's better-than-expected topline," Wells Fargo analyst Bonnie Herzog said.

ADVERTISEMENT

Organic Growth

Coca-Cola also said it now expects full-year organic revenue growth to be at least 5%, from its previous forecast of 5% growth.

Overall, revenue rose 8.3% to $9.51 billion in the third quarter ended 27 September, beating the average analyst estimate of $9.43 billion, according to IBES data from Refinitiv.

Excluding items, Coca-Cola earned 56 cents per share, inline with estimates.

The beverage maker maintained its full-year profit forecast even as it lowered its capital expenditure forecast for the year to about $2.2 billion from its prior target of about $2.4 billion.

ADVERTISEMENT

Earlier in the month, PepsiCo Inc also reported better-than-expected quarterly profit and sales, benefiting from an advertising blitz and demand for its low-calorie beverages in North America.

News by Reuters, edited by Donna Ahern Checkout. Click subscribe to sign up for the Checkout print edition.

Stay Connected With Our Weekly Newsletter

Processing your request...

Thanks! please check your email to confirm your subscription.