Coca-Cola Outpaces Rival PepsiCo, Posts Strong Q4 Earnings

Coca-Cola (KO) delivered an impressive fourth quarter, outperforming market expectations and extending its lead over competitor PepsiCo (PEP).

Key Financials:

* Revenue: $11.5 billion (vs. $10.67 billion expected)
* Adjusted EPS: $0.55 (vs. $0.52 expected)
* Price/Mix Growth: 9%
* Unit Case Volume Growth: 2%

Key Drivers:

* Higher prices and favorable product mix boosted revenue by 9%.
* Latin America emerged as a strong growth region, with net revenue up 3% and price/mix growing 23%.
* North America also experienced growth, primarily driven by sparkling flavors and plant-based beverages.

Outlook:

* Coca-Cola projects organic revenue growth of 5%-6% in 2025.
* Adjusted earnings growth is expected to be 2%-3%.

Challenges:

* Potential tariffs and inflation on agricultural commodities, including orange juice, remain headwinds.
* President Trump's aluminum tariffs may impact the US market.

Market Performance:

* Coca-Cola shares have gained 7% in the past year, outperforming PepsiCo's 16% decline.
* However, Coca-Cola still lags the S&P 500's 20% gain.

Fast Food Partnerships:

* Coca-Cola reportedly played a role in McDonald's $5 meal bundle.
* Costco will convert its food court fountain business back to Coca-Cola from PepsiCo.

Conclusion:

Coca-Cola's strong fourth quarter earnings demonstrate its continued dominance in the beverage industry. The company's global scale and local market expertise position it well to capitalize on growth opportunities in the years ahead.