Coca-Cola forecasts annual profit above estimates

Coca-Cola issued a forecast on Tuesday for 2023 profit growth above Wall Street expectations after edging past fourth-quarter revenue estimates, as demand for its cool drinks remains steady despite many price hikes to tackle rising costs.

The group’s share price firmed about 1% in premarket trading.

Coca-Cola’s near duopoly in the global carbonated drinks market along with PepsiCo has made it easier for the company to raise prices over the past few quarters to counter higher freight, commodity and labour costs.

Average selling prices rose 12% in the fourth quarter, said the maker of Sprite and Fanta, while unit case volumes slipped 1%.

Coca-Cola warned in October of emerging signs of inflation taking a bigger bite out of consumer spending power, especially in Europe with categories such as juices and bottled water in the region seeing a shift towards cheaper private label brands.

Last week, PepsiCo said it would not raise prices of its drinks and snacks further after many rounds of price hikes last year.

Coca-Cola forecast full-year adjusted earnings per share to rise 4%-5%, compared with the average analyst estimate of 2.96% growth, according to IBES data from Refinitiv.

The company’s fourth-quarter net revenue rose 7% to about $10.1bn topping estimates of about $10bn, while adjusted profit came in line at 45c per share.

Reuters