A pedestrian passes a Coca-Cola delivery truck in Mexico City, Mexico, on Wednesday, Jan. 25, 2023.

Jeoffrey Guillemard | Bloomberg | Getty Images

Coca-Cola on Monday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by price hikes and higher demand for its drinks.

Shares of the company were up less than 1% in morning trading.

Here’s what Coke reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 68 cents adjusted vs. 64 cents expected
  • Revenue: $10.96 billion adjusted vs. $10.8 billion expected

Coke reported first-quarter net income attributable to shareholders of $3.11 billion, or 72 cents per share, up from $2.78 billion, or 64 cents per share, a year earlier.

Excluding restructuring charges, certain tax matters and other items, the beverage giant earned 68 cents per share.

Net sales rose 5% to $10.98 billion. Organic revenue, which strips out the impact of acquisitions and divestitures, climbed 12% in the quarter, driven largely by higher prices on Coke’s drinks.

Like many companies, Coke has been hiking prices to mitigate the impact of inflation. Most of the first quarter’s price increases were implemented last year, although executives said the company raised prices further across operating segments during the first three months of the year.

But the higher prices had a muted effect on demand for Coke’s beverages.

The company’s unit case volume, which excludes the impact of pricing and currency changes, grew 3% in the quarter. Volume in North America was flat, while in Europe, the Middle East and Africa it fell 3%. But demand was strong in Latin America and the Asia-Pacific region.

Coke reported 3% volume growth for its sparkling soft drinks unit. Its namesake soda also reported 3% volume growth, while Coke Zero Sugar’s volume rose 8%.

The company’s water, sports, coffee and tea division saw volume growth of 4%, fueled by strong demand for its coffee and bottled water. Coke’s coffee business reported its volume increased 9%, while its water division’s volume rose 5%.

The earthquake in Turkey hurt demand for its tea, which saw volume shrink 3% in the quarter. Volume for its sports drinks, which include Bodyarmor and Powerade, also fell.

Volume for Coke’s juice, dairy and plant-based beverages unit was flat. The suspension of its Russian business offset bright spots, like strong sales for its Fairlife dairy brand in the U.S.

The company reiterated its prior forecast for 2023. It is projecting organic revenue growth of 7% to 8% and comparable earnings per share growth of 4% to 5% for 2023.

Additionally, Coke expects commodity inflation to affect its cost of goods sold by the mid single digits in 2023. Oil spot prices and freight costs are down, but other commodities’ higher prices are sticking around for longer, CFO John Murphy told analysts on the company’s conference call.

Murphy also said that the company is maintaining its financial flexibility amid its long-running tax battle with the IRS. In November 2020, the U.S. Tax Court ruled that the company owed $3.4 billion in taxes.

That figure has since been slashed to $1.6 billion. Murphy said Coke is waiting for the tax court to give its final opinion on the case, so the company can move forward in the appeals process.

“Overall we don’t expect the tax dispute to have a bearing on our ability to deliver on our capital allocation agenda and drive long-term business growth,” he said.


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