Coca-Cola Lifts Outlook as Economic Reopening Bolsters Sales

(Bloomberg) -- Coca-Cola Co. reported quarterly sales and profit that exceeded Wall Street’s expectations on Wednesday and raised its full-year outlook, sending shares higher. 

• Third-quarter organic revenue, which excludes the impact of items like currency and acquisitions, was up 14%, above analysts’ average estimate. Adjusted earnings of 65 cents a share outpaced expectations.
• The owner of the Minute Maid, Dasani and Schweppes brands sees organic revenue growth in a range of 13% to 14% for the full year, an increase to the bottom end of its guidance issued in July.
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Key Insights

• Coca-Cola said unit case volume in the period was ahead of that measure in the 2019 quarter, indicating that consumers’ return to restaurants, stadiums and amusement parks is bolstering results.
• The key gauge of comparable operating margin narrowed slightly to 30%. The company attributed this to a significant increase in marketing investments compared with the prior year, partially offset by strong sales growth.
• Coca-Cola said it expects elevated commodity inflation to continue into 2022. Chief Executive Officer James Quincey said on the company’s call with analysts that with higher labor and logistics costs, coupled with investments, the company will raise prices as needed.

Market Reaction

• The shares rose as much as 3% in New York trading on Wednesday, the most intraday since July 21. Coca-Cola stock dipped 0.7% this year through Tuesday’s close, compared with a 22% rise for the S&P 500 index.

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