Key Highlights

  • Net revenues were $13.4 billion in the third quarter, up 7%, with organic revenues also up 7%.
  • Comparable EPS was $0.91, up 11%, and GAAP EPS was $0.93, up 8%.
  • Unit case volume rose 5%, with price/mix adding 1 percentage point.
  • Full-year comparable EPS growth is now at least 11%, from 9% to 10%.
  • Free cash flow guidance is at least $13.0 billion, up from about $12.4 billion.

Coca-Cola Earnings: How Did the Third Quarter Compare With Expectations?

Coca-Cola (NYSE:KO) reported third-quarter results on Tuesday, October 27, for the quarter ended October 2. Net revenues were $13.4 billion, up 7%, against analyst estimates of about $12.9 billion. Comparable EPS was $0.91, up 11% and above estimates of about $0.88, while GAAP EPS was $0.93, up 8%.

Management raised its full-year outlook. Comparable EPS growth is now expected to be at least 11%, up from 9% to 10%, and organic revenue growth at least 5%, up from about 5%.

Coca-Cola Volume and Pricing: What Drove 7% Organic Growth?

Unit case volume rose 5% and price/mix added 1 percentage point. Management credited volume growth led by India, China, Mexico and Brazil, along with pricing actions. Concentrate shipments ran 2 points ahead of unit case volume because of timing, which flattered the quarter.

Operating margin was 33.4% against 32.0% a year earlier, and comparable operating margin was 32.9% against 31.9%. Management said margin expansion came from organic growth and currency, partly offset by higher marketing investment and operating expenses. Currency was a 1-point tailwind to revenues, a 3-point tailwind to operating income and a 2-point tailwind to EPS.

Coca-Cola Regions: Where Did Latin America and North America Land?

Latin America led, with revenues up 25% to $1.958 billion and operating income up 29% to $1.152 billion on 6% volume growth. EMEA revenues rose 4% to $3.104 billion with operating income up 7%, and Asia Pacific revenues rose 4% to $1.563 billion with operating income up 8%.

North America, the largest segment, grew revenues 3% to $5.386 billion and operating income 5% to $1.766 billion, with unit case volume flat. Bottling Investments revenues rose 13% to $1.523 billion and operating income rose 261% to $205 million. The company reported value share gains in Latin America, North America and Asia Pacific and a loss in EMEA.

Coca-Cola Cash and Guidance: What Changed for Free Cash Flow and 2027?

Nine-month cash from operations was $12.5 billion and free cash flow was $11.4 billion. Dividends paid totaled $6.8 billion, against $4.4 billion a year earlier, and share repurchases were $900 million. Full-year free cash flow is now guided to at least $13.0 billion, from at least $15.2 billion of operating cash flow less about $2.2 billion of capital spending.

Guidance also lowered the underlying tax rate to 19.7% from 19.9%. For the fourth quarter, management flagged about a 1% currency tailwind and about a 4% headwind to revenues from acquisitions and divestitures. For 2027, it flagged a slight currency headwind and about an 8% revenue headwind from divestitures, with full guidance due alongside fourth-quarter results.

Coca-Cola Next Steps: What Should Investors Watch Into Year-End?

Watch whether concentrate shipments align with unit case volume in the fourth quarter, how North America volume recovers from flat, and the 2027 guidance due with fourth-quarter results. The divestiture headwinds of about 4% to fourth-quarter revenues and about 8% to 2027 revenues are the key swing factors.