Coca-Cola posts surprise revenue jump on higher prices, steady demand

Coca-Cola posted a surprise rise in comparable revenue and topped estimates for fourth-quarter profit on Tuesday, helped by higher prices and resilient demand for its sodas, sending the company's shares up about 4 per cent premarket.

The company has focused on capturing demand in emerging markets such as India and expanding its portfolio in North America to include brands such as the premium Fairlife milk label, as well as the sparkling water brand Topo Chico.

Partnerships with value meal deals at fast-food chains such as McDonald's have also buoyed sales.

Quarterly volumes rose across Coca-Cola's global markets for the first time in 2024, with North America posting a 1 per cent growth in the fourth quarter.

At the same time, global prices rose 9% in last three months of 2024, following a 10 per cent jump in the third quarter.

Coca-Cola has benefited from robust demand for its sparkling soft drink brands such as Fanta and Sprite, with volumes rising 2 per cent in the segment. It accounts for about two-thirds of the company's total volumes.

In contrast, rival PepsiCo last week reported a 3 per cent 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.

Coca-Cola's fourth-quarter comparable net revenue rose 4.2 per cent to $11.40 billion, while analysts had expected it to drop 2.47 per cent to $10.68 billion, according to data by LSEG.

The company's profit of 55 cents per share topped estimates of 52 cents.

Coca-Cola expects organic revenue growth of 5 per cent to 6 per cent for 2025, compared with a 12 per cent rise in 2024. The forecast is at the higher end of the company's long-term organic revenue growth target of between 4 per cent and 6 per cent.