Coca-Cola Co (NYSE: KO), on Tuesday, reported a strong fourth quarter and issued upbeat guidance for the future. Shares are still down nearly 1.0%.
Coca-Cola’s full-year outlook
For the full financial year, the beverage giant is calling or a 4.0% to 5.0% annualised growth in adjusted per-share earnings. In comparison, analysts were at a much narrower 2.8% increase. On CNBC’s “Squawk Box”, CEO James Quincey said:
In 2023, we’ll see some moderation in the macros but we’re confident that the momentum we’ve generated will carry us through and we’ll have another strong year.
China will continue to recover and be more normalised in the second quarter, making up for another tailwind for Coca-Cola, he added.
CEO Quincey’s take on inflation
Operating margin climbed 280 basis points to 20.5% in the fourth quarter. According to CEO Quincey, some inflationary pressures are still there in certain geographies but consumers have been fairly resilient in the face of price increase so far.
We’ve maintained strong strength in our business. We believe if we invest in marketing, innovation, and affordability on core brands, getting the right package and price, we can continue to keep consumers in our franchise.
Wall Street currently recommends that you buy Coca-Cola stock and sees upside in it to about $69 on average.
Coca-Cola Q4 earnings snapshot
- Net income printed at $2.03 billion versus the year-ago $2.41 billion
- Per-share earnings also declined from 56 cents to 47 cents
- Adjusted EPS came in at 45 cents as per the earnings press release
- Revenue jumped 7.0% on a year-over-year basis to $10.13 billion
- Consensus was 45 cents of adjusted EPS on $10 billion in revenue
Coca-Cola ended the year with $9.5 billion in free cash flow – down 15%. For the year, Coca-Cola stock is down 5.0% at writing.
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