Coca-Cola beats earnings estimates, raises full-year outlook amid rising global demand

Coca-Cola raised its full-year outlook on July 23 as global demand for the beverages surged in the second quarter. The company now expects organic revenue growth of 9% to 10% in 2024, up from a previous forecast of 8% to 9%.

Coca-Cola raises 2024 outlook after strong second-quarter results, driven by rising global demand

Coca-Cola raised its full-year outlook on July 23 as global demand for the beverages surged in the second quarter.

Coca-Cola expects organic revenue growth of 9% to 10% in 2024, up from its previous guidance of 8% to 9%. The company also raised its comparable earnings growth guidance from 4% to 5% and increased it to 5% to 6%.

“Our updated 2024 guidance reflects the momentum in our business during the first half of the year and our confidence in our ability to execute on our plans in the second half of the year,” Coca-Cola Chief Financial Officer John Murphy said on a conference call.

The company’s shares were up about 1% in morning trading.

Here’s what Coca-Cola released in its second-quarter report compared to Wall Street expectations, CNBC reports based on an analyst survey by LSEG:

Coca-Cola reported second-quarter net income attributable to shareholders of $2.41 billion, or 56 cents a share, compared with $2.55 billion, or 59 cents a share, a year earlier. Excluding restructuring costs, charges related to the value of its Fairlife milk brand and other items, the beverage giant earned 84 cents a share.

Net sales rose 3% to $12.36 billion. Organic revenue, which excludes acquisitions, divestitures and foreign currencies, rose 15% in the quarter.

Coca-Cola’s unit case sales volume rose 2% in the quarter, driven by international markets — a figure that excludes the impact of prices and foreign currencies to reflect demand.

Coca-Cola faces volume decline in North America despite global growth in carbonated and plant-based beverages

In North America, however, volume fell 1% in the quarter. Coca-Cola said volume in North America fell for its water, sports drinks, coffee, tea, Coca-Cola trademark and other soda brands, offsetting growth for its juices, dairy and plant-based beverages. Rival PepsiCo said earlier this month that U.S. consumer sentiment was weakening, hurting demand for its beverages and snacks.

Coca-Cola CEO James Quincey attributed the weak sales in out-of-home channels to declining case volume in North America. Coca-Cola is working with restaurant customers to boost demand and launch meal kits with food and beverages. CNBC previously reported that Coca-Cola gave McDonald’s marketing dollars for a $5 meal that includes a small soft drink to make it more appealing to franchisees who might otherwise be wary of deep discounts.

Coca-Cola’s carbonated drinks business, including its eponymous soda, saw global volumes rise 3%, driven by strong demand in Asia Pacific and Latin America. Its juices, dairy and plant-based beverages businesses saw volumes rise 2%. The water, sports, coffee and tea business saw flat volumes, hurt by shrinking demand for bottled water and falling sales of Costa coffee in the UK.

Coca-Cola prices rose 9% compared to the same period last year, with about half of the increase due to hyperinflation in some markets, such as Argentina.

In the third quarter, Coca-Cola expects foreign currencies to weigh on its results again. The company is forecasting a 4% currency headwind for comparable net sales and an 8% currency headwind for comparable earnings per share.