Coca-Cola posted a surprise rise in comparable revenue and topped estimates for fourth-quarter profit, driven by higher prices and resilient demand for its sparkling sodas.
Volumes of sparkling soft drink brands such as Fanta and Sprite returned to growth in the quarter, rising 2%, after staying flat in the prior quarter. The category accounts for about two-thirds of the company's total volumes.
In contrast, rival PepsiCo last week reported a 3% drop in volume for its two biggest segments of North America beverages and Frito-Lay North America for the fourth quarter.
"That's probably key difference versus Pepsi. Pepsi has been losing share in North America in sparkling beverages and Coca-Cola has been outperforming in no-sugar and sparkling in particular," said Charlie Higgs, director of Consumer Staples Research at Redburn Atlantic.
Meanwhile, under CEO James Quincey, the company has expanded its portfolio in North America to include brands such as premium Fairlife milk and sparkling water Topo Chico.
"The diverse offerings have proven buoyant in the face of consumers cutting back on sugary drinks, that is important to long-term demand structures," said Brian Mulberry, Client Portfolio Manager at Zacks Investment Management, which holds shares in Coca-Cola.
Emerging Markets
The world's top soda company is also capturing demand in emerging markets such as India by catering to more local tastes, as well as offering packages at different price points.
Volumes rose across Coca-Cola's global markets in the fourth quarter, with North America up 1%. Global prices rose 9%, following a 10% jump in the third quarter.
The company's organic revenue growth forecast of 5% to 6% for 2025 came at the upper-end of its long-term target.
Coca-Cola's fourth-quarter comparable net revenue rose 4.2% to $11.40 billion (€11.06 billion), compared with a 2.47% drop expected by analysts.
Adjusted profit of 55 cents per share beat expectations of 52 cents, according to data compiled by LSEG.
