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Strong Financial Results
Coca-Cola achieved revenues of $11.5 billion in the last quarter, a 6% year-over-year increase. This result exceeded the expectations of the London Stock Exchange Group (LSEG), as they were counting on around $10.68 billion. Notably, the organic revenue growth (excluding acquisitions and currency fluctuations) reached 14%. Global sales volume for unit packs rose by 2%, indicating that Coca-Cola’s consumer base remains strong and its pricing strategies are effective. Net income increased by 11% to $2.20 billion. The earnings per share (EPS) surprised at $0.55, surpassing the original estimate of $0.52.
Demand Growth and Strategic Steps
Coca-Cola has invested in expanding its portfolio, including offering healthier alternatives like vitamin-infused and sugar-free beverages. The company is also focusing on the digitalization of distribution channels and optimizing marketing through artificial intelligence, which helps it reach target groups more effectively. Inflation played a significant role in revenue growth as Coca-Cola was able to pass some of its rising input costs onto consumers through slightly higher prices. However, trade tensions caused by U.S. President Donald Trump pose challenges, as the new 25% tariffs on aluminium imports to the U.S. could raise costs for the manufacturer.
Stock Performance
Coca-Cola’s stock responded positively to the strong results with moderate growth, as investors appreciated the company’s stability and resilience against global economic challenges.* They have already strengthened by more than 11% since the beginning of the year and they gained significantly following the fourth-quarter results.* As of Friday, February 14, 2025, the stock was nearing its all-time high. The positive outlook for 2025 is supported by expected organic revenue growth of 5% to 6%, signalling confidence in the continuation of the positive trend. [1] EPS growth is projected to be between 8% and 10%.
Source: Investing.com*
Advantage Over Competitors
Unlike Coca-Cola, its main competitor PepsiCo saw a 3% decline in sales in North America, affecting its two largest segments - beverages and Frito-Lay snacks. According to Charlie Higgs, director of consumer goods research at Redburn Atlantic, the main difference between the two rivals lies in Coca-Cola's strength in sugar-free and carbonated drinks, while Pepsi is losing market share in this area. Coca-Cola is diversifying its portfolio with premium brands such as dairy drinks Fairlife and sparkling waters Topo Chico. In emerging markets like India, it is adapting to local consumer trends and prices.
European Partner's Success
Coca-Cola Europacific Partners (CCEP) has strengthened its market position through a €1 billion ($1.05 billion) share buyback, showing confidence in its growth potential. Despite a decline in pre-tax profits, CCEP saw significant revenue growth, driven mainly by strong performance in the Australia-Pacific markets, while the market in Europe market lagged behind. Effective cost-reduction measures helped increase adjusted operating profit by 8%, reflecting successful cost optimization. CCEP’s leadership is confident in the strategic direction for the future. Planned investments and business initiatives are aimed at supporting growth in promising segments, focusing on sustainability and long-term goals.
Conclusion
Coca-Cola continues to prove its strong position during turbulent times, responding flexibly to inflation and trade tensions. Its ability to adapt to trends and effectively implement digital and pricing strategies helps maintain growth. Expectations for 2025 suggest continued optimism despite potential risks. Competitive advantages enable Coca-Cola to better handle challenges compared to its rivals. The positive outlook for the company's stock and the stability of its business performance indicate that Coca-Cola remains a key player in the market, capable of not only surviving but thriving in a changing global economy. [2]
* Historical data is not a guarantee of future performance.
[1], [2] Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on current economic conditions that may change. These statements are not guarantees of future performance. Forward-looking statements by their nature involve risk and uncertainty because they relate to future events and circumstances that cannot be predicted, and actual developments and results may differ materially from those expressed or implied by any forward-looking statements.
Caution! This marketing material is not and should not be construed as investment advice. Historical data is not a guarantee of future performance. Investing in foreign currencies may affect returns due to fluctuations. All securities transactions may result in both profits and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on current economic conditions that may change. These statements are not guarantees of future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s. regulated by the National Bank of Slovakia.
Sources:
https://www.cnbc.com/2025/02/11/coca-cola-ko-q4-2024-earnings.html
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