Coca-Cola’s Q3 Earnings Expectations

Coca-Cola is expected to announce its third-quarter earnings before the bell on Tuesday. According to Wall Street analysts surveyed by LSEG, formerly known as Refinitiv, the following expectations have been set:

• Earnings per share: 69 cents
• Revenue: $11.44 billion

Challenges Faced by Coca-Cola

This year, Coca-Cola’s stock has declined by 15%, leading to a decrease in its market value to approximately $234 billion. Investors are concerned about both short-term and long-term challenges for the company. Several factors contribute to this pressure:

• Raising prices on products, which has driven some consumers to opt for cheaper private-label alternatives.
• The strong U.S. dollar, making Coca-Cola’s drinks more expensive abroad.
• Sustained high sugar prices while other commodities have become less expensive.

These challenges not only affect Coca-Cola’s profit margins but also impact other companies like Walmart, as users of diabetes drug Ozempic are spending less on groceries. Consequently, shares of Coca-Cola and its competitor PepsiCo have been negatively affected.

Coca-Cola’s Portfolio and Future Expectations

Although Coca-Cola has diversified its portfolio in recent years to include fewer sugary drinks, its namesake brand and other sodas remain significant for the company’s net sales. Additionally, the introduction of alcoholic drinks by Coca-Cola has also seen a decline in consumption among users of GLP-1 drugs.

Looking ahead to 2023, Coca-Cola anticipates a comparable adjusted earnings per share growth of 5% to 6% and organic revenue growth of 8% to 9%.