Coca-Cola tops estimates, raises earnings outlook as global beverage demand rises

Coca-Cola on Tuesday reported quarterly earnings and revenue that topped analysts' expectations, fueled by higher demand for its beverages.

For the full year, Coke is now projecting comparable earnings per share growth of 8% to 9%, up from its prior forecast of 7% to 8%, thanks to lower effective tax rates.

And despite uncertainty over the U.S.-Iran war and its ramifications for the broader economy, the company reiterated its previous outlook of organic revenue growth of 4% to 5%.

"During the quarter, the external environment differed greatly across our markets," CEO Henrique Braun said on the company's conference call. "While many consumers remained resilient, others are under pressure due to persistent inflation, greater macroeconomic uncertainty and volatilities driven by the conflict in the Middle East."

Shares of the company rose 5% in morning trading.

Coke reported first-quarter net income attributable to shareholders of $3.92 billion, or 91 cents per share, up from $3.33 billion, or 77 cents per share, a year earlier.

Excluding impairment charges and other items, the beverage giant earned 86 cents per share.

The company’s adjusted net sales climbed 12% to $12.47 billion. Coke’s organic revenue, which strips out acquisitions, divestitures and currency, rose 10% in the quarter.

The company’s unit case volume increased 3% globally. The metric excludes pricing to reflect demand more accurately.

In the past few quarters, Coke executives have reported weaker demand from lower-income consumers. However, premium brands like Fairlife and Smartwater have stayed strong in the current K-shaped economy, boosted by high-income shoppers who aren’t feeling the same pinch as low-income consumers.

Coke has also been trying to offer more affordable options for budget-conscious shoppers, Braun said on Tuesday’s call.

All of Coke’s operating segments reported volume growth for the quarter, including its home market. The company’s volume in North America increased 4%.