Coca-Cola’s Q4 Revenue Beat Expectations with Strong Price/Mix, Strong Sales Growth

The Coca-Cola Company has reported its financial results for the fourth quarter and full year of 2024. During the fourth quarter, Coca-Cola experienced a 6% increase in net revenues, reaching $11.5 billion.

This growth was largely driven by a 14% surge in organic revenues, influenced by a 9% rise in price/mix and a 5% increase in concentrate sales. Notably, concentrate sales outpaced unit case volume by 3 points, mainly due to two extra shipping days and the timing of concentrate shipments. Operating income for the quarter saw a significant boost, growing by 19%, with a comparable currency-neutral operating income increase of 22%.

Coca-Cola Compay Reports Double Beat for Fourth Quarter 2024

Earnings per share (EPS) for the fourth quarter grew by 12% to $0.51, with comparable EPS reaching $0.55. The company also gained value share in the total nonalcoholic ready-to-drink (NARTD) beverages market during the quarter.

Despite these positive results, cash flow from operations for the full year was $6.8 billion, marking a decrease of 41% from the previous year. This decline was primarily attributed to a $6.0 billion deposit made to the U.S. Internal Revenue Service (IRS) related to ongoing tax litigation.

Coca-Cola’s fourth-quarter performance exceeded expectations in terms of EPS, which was anticipated to be $0.52. Revenue for the quarter reached $11.5 billion, surpassing the expected $10.7 billion. This indicates a stronger-than-expected performance in terms of revenue generation, driven by solid growth in price/mix and concentrate sales.

The company’s performance was bolstered by its strategic initiatives in revenue growth management, particularly through offering diverse package options and leveraging its global and local brand portfolio. Coca-Cola’s emphasis on returnable glass bottles and expansion of cold-drink equipment contributed to volume growth and value share gains.

However, the company faced challenges from currency headwinds, which impacted EPS by 1 point for the quarter and 9 points for the full year.

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Coca-Cola Expects 5% to 6% Organic Revenue Growth

Coca-Cola has set ambitious goals for continued growth. The company expects to achieve organic revenue growth of 5% to 6%. However, it anticipates a 3% to 4% currency headwind for comparable net revenues due to current exchange rates and hedged positions. Additionally, the company foresees a slight headwind from acquisitions, divestitures, and structural changes.

Coca-Cola projects an underlying effective tax rate of 20.8% for 2025, up from 18.6% in 2024, influenced by the enactment of global minimum tax regulations in several countries.

The company aims for comparable currency-neutral EPS growth of 8% to 10% and comparable EPS growth of 2% to 3%, compared to $2.88 in 2024. Despite these challenges, Coca-Cola expects to generate free cash flow, excluding the fairlife contingent consideration payment, of approximately $9.5 billion, supported by strong cash flow from operations and controlled capital expenditures.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.