On Tuesday, February 11, the Coca-Cola Company (NYSE: KO) released its Q4 and full-year 2024 results, showing 14% organic revenue growth despite currency headwinds and regional market pressures.The company’s all-weather strategy has been effective, with strong performance in both the US and international markets. Moreover, CEO James Quincey highlighted the company’s agility in navigating external challenges and its focus on capturing growth opportunities.For the quarter, net revenues increased 6% to $11.5 b ...

Soft drinks giant Coca-Cola Company KO reported better-than-expected fourth-quarter earnings results, and the following are the analysts’ comments on them.Piper Sandler analyst Michael S. Lavery reiterated an Overweight rating on the shares with a price forecast of $73.00.President Trump implemented a 25% tariff on all imported steel and aluminum, with no exceptions or exemptions. The tariff impact on KO seems manageable, as the company could switch to PET bottles if aluminum cans become too costly, whether ...

The Coca-Cola Company (KO) shares rose more than 4.7% on Feb 11., 2025 after it reported upbeat earnings. The company reported fourth-quarter 2024 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. The company’s revenues and earnings per share (EPS) also improved year over year. The results have benefited from continued business momentum, aided by improved pricing across markets.Coca-Cola reported a comparable EPS of 55 cents in the fourth quarter, up 12% from the year-ago per ...

Core Viewpoint - Coca-Cola's Q4 earnings exceeded market expectations, with revenue of $11.5 billion and adjusted earnings of $0.55 per share, driven by stronger pricing and a positive outlook for 2025 [1][3][4] Financial Performance - Coca-Cola reported a 6% year-over-year increase in revenue on a reported basis, while organic revenue grew by 14%, supported by a 9% increase in price/mix and a 5% rise in concentrate sales [3][4] - Q4 volume increased by 2%, and the operating margin improved by 90 basis points year-over-year to reach 24% [4] - Net earnings rose by 12% to $0.55 per share, with expectations for organic sales growth between 5% and 6% and bottom line growth between 2% and 3% [4] Stock Performance - Following the earnings report, Coca-Cola's stock rose by 5%, reflecting solid Q4 performance and guidance that met market expectations [1][5] - Since the start of 2024, KO stock has risen 13%, underperforming the S&P 500's 27% gain, attributed to a slowdown in volume growth [2][5] - KO trades at approximately $68 per share, at 23 times trailing earnings of $2.88 per share, below its five-year average P/E ratio of 25x, indicating potential for growth [7] Market Outlook - Despite recent challenges, Coca-Cola's management reassured investors about manageable impacts from potential metal import tariffs, as packaging costs constitute a small portion of expenses [4][7] - The company is viewed as an attractive long-term investment due to strong volume growth, improving margins, and limited impact from aluminum tariffs [7]

Group 1: Impact of Tariffs on Coca-Cola - Coca-Cola may need to shift focus to plastic bottles due to President Trump's 25% tariff on aluminum imports, which could affect the availability of Diet Coke in cans [1][2] - CEO James Quincey stated that while the price increase from tariffs is not insignificant, it will not radically change the business, as packaging costs are only a small component of overall expenses [2][3] Group 2: Aluminum Supply Chain - Approximately half of the aluminum used in the U.S. is imported, primarily from Canada, which means Coca-Cola will face increased costs if tariffs are implemented [3] - Canadian businesses have already begun to feel the effects of the tariffs, with some U.S. clients canceling orders [4] Group 3: Political Context and Responses - Canada's Minister of Innovation, Science and Industry expressed concerns that the tariffs could be damaging to the U.S. economy and emphasized the importance of maintaining critical supply chains [5] - President Trump's executive order aims to boost U.S. aluminum production and protect domestic industries from unfair trade practices [6]

Core Insights - Coca-Cola's stock experienced a significant increase of 4.7% following the release of its fourth-quarter results, which surpassed Wall Street expectations [1][2]. Financial Performance - The company reported non-GAAP adjusted earnings per share of $0.55 on sales of approximately $11.5 billion for the fourth quarter, exceeding analyst estimates of $0.52 per share and $11.42 billion in sales [2]. - Revenue grew by 6.5% year over year in the fourth quarter, while adjusted earnings per share rose by 12% compared to the previous year [3]. - Currency-adjusted operating income saw a substantial increase of 22% compared to Q4 of the prior year [3]. Growth Drivers - The strong performance was primarily attributed to pricing increases and robust results in key geographic segments, with organic revenue growth of 14%, significantly outpacing the expected growth of around 7% [4]. - The company achieved broad-based market share gains in key product categories and continued to improve margins [5]. Future Guidance - For the current year, Coca-Cola is guiding for adjusted organic revenue growth between 5% and 6%, which is lower than the unexpectedly strong performance in Q4 [6]. - Management anticipates adjusted earnings per share to increase between 8% and 10%, with projected adjusted free cash flow of approximately $9.5 billion, a notable improvement from $4.7 billion last year [7]. Valuation - Following the recent gains, Coca-Cola's stock is trading at about 23 times this year's expected earnings, which may not appear particularly cheap, but it offers a reliable dividend as an industry leader [8].

Core Insights - The Coca-Cola Company reported fourth-quarter 2024 results with revenues and earnings per share (EPS) exceeding expectations, driven by strong business momentum and improved pricing across markets [1][3]. Financial Performance - Comparable EPS for the fourth quarter was 55 cents, a 12% increase year over year, surpassing the Zacks Consensus Estimate of 51 cents [2]. - Revenues reached $11.5 billion, a 6% year-over-year improvement, exceeding the Zacks Consensus Estimate of $10.69 billion [3]. - Organic revenues rose 14% compared to the prior-year quarter, with revenue growth across all operating segments except Bottling Investments [3]. Volume and Pricing Dynamics - Concentrate sales increased by 5% year over year, with a 9% improvement in price/mix, benefiting from higher pricing in inflationary markets [5]. - Total unit case volume rose 2% year over year, driven by growth in China, Brazil, and the United States [7]. - The sparkling soft drinks category saw a 2% increase in unit case volume, with Coca-Cola Zero Sugar advancing 13% [8]. Segment Performance - Reported revenues grew 10% in Latin America, 16% in North America, 6% in EMEA, 9% in the Asia Pacific, while Bottling Investments saw a 23% decline [11]. - Organic revenues improved significantly across various regions, with Latin America showing a 25% increase [11]. Margin Analysis - Operating income increased by 19% year over year to $2.71 billion, with a comparable operating income rise of 8% to $2.73 billion [12]. - The operating margin expanded to 23.5%, up 252 basis points from the prior year, with comparable currency-neutral operating margin reaching 25.8% [13]. Future Guidance - For 2025, the company anticipates organic revenue growth of 5-6% and comparable EPS growth of 2-3% from the $2.88 reported in 2024 [14][15]. - The guidance includes expected currency headwinds and impacts from acquisitions and divestitures [15][16].

Financial Data and Key Metrics Changes - The company reported a 7% growth in comparable earnings per share for 2024, despite facing nearly double-digit currency headwinds and the impact of bottler refranchising [7][39] - Organic revenues grew by 14% in the fourth quarter, with unit case growth at 2% and concentrate sales growing 3 points ahead of unit cases [40][41] - Comparable gross margin increased by approximately 160 basis points, while comparable operating margin rose by approximately 80 basis points [41] Business Line Data and Key Metrics Changes - The sparkling soft drinks category continued to show growth, alongside value-added dairy and tea, which are reaching global scale [10] - In North America, both transactions and volume grew, with Trademark Coca-Cola and Fairlife leading in at-home retail sales growth [22] - Volume in Europe declined during the quarter, but revenue and profit still grew, indicating a mixed performance across Western and Eastern markets [16] Market Data and Key Metrics Changes - In Asia Pacific, volume growth was driven by successful marketing campaigns, with refillable offerings contributing to approximately one-third of South Pacific volume growth [11][12] - The company experienced volume growth in China despite macroeconomic headwinds, with improved trends noted [12] - In Africa, volume declined primarily due to pressures in North Africa and Nigeria, although South Africa showed strong volume momentum [19] Company Strategy and Development Direction - The company is focused on executing its all-weather strategy, emphasizing agility to navigate market dynamics and drive long-term balanced growth [8][36] - There is a strong emphasis on innovation, with the company investing in digital capabilities and enhancing marketing effectiveness to drive consumer recruitment and increase consumption [31][36] - The company aims to maintain a balance between volume and price/mix growth, anticipating a slight headwind from bottler refranchising in 2025 [43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall consumer environment, noting stable economic growth across developed and emerging markets [58] - The company expects intense inflationary pricing to moderate throughout 2025, with a balanced approach to volume and price growth [43][66] - Management highlighted the importance of adapting to market dynamics and consumer needs, particularly in response to inflation and changing consumer preferences [60][102] Other Important Information - The company reported a 93% adjusted free cash flow conversion for 2024, within its long-term targeted range [42] - The effective tax rate for 2025 is expected to increase to 20.8%, primarily due to global minimum tax regulations [46] - The company has a strong focus on maintaining its dividend growth, having done so for 62 consecutive years [50] Q&A Session Summary Question: Insights on the global consumer environment - Management noted that while lower-income segments face pressure, the broader consumer base is gaining disposable income and spending, indicating robust demand [58][60] Question: Granularity on the 5% organic revenue growth forecast for 2025 - Management expects a balance between volume and price growth, with a slight weighting towards price due to inflationary pressures [65][66] Question: Context on organic sales growth and industry growth - Management anticipates industry growth to normalize, with expectations of gaining market share while achieving 5% to 6% growth [75][76] Question: Key drivers of margin and profitability progress - Management indicated that margin expansion is expected from marketing effectiveness and operational efficiency, despite currency pressures [80][81] Question: Thoughts on the global trade environment and tariffs - Management emphasized a localized supply chain approach, with strategies in place to mitigate impacts from tariffs and commodity price fluctuations [90][92] Question: Impact of GLP-1 drugs on consumption - Management observed anecdotal evidence of GLP-1s affecting consumption but noted that overall momentum in North America remains strong [101][102] Question: Cash allocation strategy post substantial payments - Management indicated a continued focus on supporting the business and dividend, with potential for increased M&A and share repurchases in the future [107][108] Question: Insights on the modern soda category - Management welcomed innovation in the beverage space and expressed confidence in competing across all segments, including modern soda [111][114] Question: Impact of aluminum costs on pricing strategy - Management assured that the company can adapt its packaging strategy to manage costs and maintain affordability for consumers [120][122] Question: Comments on Mexico's market dynamics - Management highlighted a strong playbook in Mexico, with a broad beverage portfolio and effective execution strategies [130][132]

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Trump on Monday raised tariffs on all aluminum and steel imports to 25% from 10%, starting next month. The action is widely seen as taking aim at China, although the U.S. imports little steel directly from the country."As it relates to our strategies around ensuring affordability and ensuring consumer demand, if one package suffers some increase in input costs, we continue to have other packaging offerings that will allow us to compete in the affordability space," Quincey said on the company's earnings conf ...