Coca-Cola Anticipates Strong Earnings, Expectations Outlined

Positive Quarterly Outlook

Coca-Cola (KO) is poised to deliver another robust quarter, buoyed by gains over PepsiCo (PEP). The beverage giant will release its fourth quarter earnings report and provide 2025 guidance before market open on Tuesday. Wall Street estimates $10.67 billion in Q4 revenue and earnings per share of $0.52.

Market Analysis

Analysts also anticipate a 6.71% price/mix increase, while unit case volume growth is projected to decline by 0.21%. Bank of America analyst Bryan Spillane highlights Coca-Cola's "decent balance between volume growth and price," contributing to its outperforming performance.

For the full year, organic revenue is expected to surge by 10%, attributed to higher prices offsetting headwinds such as cautious consumer spending, unfavorable commodity costs, and international market challenges. UBS analyst Peter Grom emphasizes Coca-Cola's exceptional ability to deliver positive organic revenue growth against industry peers facing growth constraints.

Stock Performance

In the past year, Coca-Cola shares have climbed by 7%, outpacing PepsiCo's 16% drop. However, it lags behind the S&P 500's (^GSPC) 20% gain.

Earnings Projections

Below is a comparison of Wall Street's earnings expectations for Coca-Cola in the fourth quarter versus last year's actual results:

* Revenue: $10.67 billion (vs. $10.85 billion)
* Adjusted EPS: $0.52 (vs. $0.49)
* Price/mix growth: 6.71% (vs. 9.00%)
* Unit case volume growth: -0.21% (vs. 2.00%)

Growth Drivers and Challenges

Spillane highlights the significance of the Latin America market, while investors monitor the company's ability to sustain earnings growth amidst currency fluctuations. CFO John Murphy anticipates a "more normalized pricing environment" in 2025.

Tariffs and inflation impacts on agriculture commodities, including orange juice, pose challenges for management to address. Emerging markets sales and newer products like Coke Energy and AHA flavored sparkling water are expected to bolster growth. Risks identified by CFRA analyst Garrett Nelson include currency volatility, consumer trends, and limited product diversification.

Partnerships with fast food chains like McDonald's and Costco's shift back to Coca-Cola from PepsiCo contribute to the company's positive outlook.