Coca-Cola Raises Full-Year Outlook After Third-Quarter Earnings Beat Forecasts

Coca-Cola raised its full-year outlook after third-quarter adjusted earnings of $0.91 a share beat forecasts, as global drink volumes rose 5% while North America stalled.

Coca-Cola reported third-quarter results on Tuesday, before the opening bell in New York. Management discusses the results on an earnings call at 8:30 a.m. Eastern time.

Adjusted profit beat forecasts, and reported profit rose too

Adjusted earnings were $0.91 a share. Analysts had expected $0.88 a share, according to FactSet. Comparable earnings, the company's adjusted measure, rose 11% from a year earlier.

Reported earnings were $0.93 a share, up 8% from a year earlier. The reported line sits above the adjusted line this quarter. That ordering is unusual, and it means one-off items helped rather than hurt.

Revenue grew 7% to $13.4 billion. Wall Street had expected $12.92 billion. A year earlier, revenue was $12.46 billion.

Global volume carried the quarter; North America did not

Global unit case volume rose 5%. Unit case volume is the company's own measure of how much beverage it sells. Growth was led by India, China, Mexico and Brazil.

Price and mix added 1% worldwide. Price/mix reflects the prices charged plus shifts toward pricier products and packages. It is not the price increase on every bottle or can.

North America was the weak spot. Volume there was unchanged from a year earlier. Growth in Coca-Cola branded drinks was offset by declines in water, sports drinks, coffee and tea.

Pricing actions at home were partly offset by an unfavorable product mix. Even so, North America operating income rose 5%. Revenue growth and the timing of marketing spending helped, against higher input costs.

The flat home print still compares well with the closest rival. Rival PepsiCo recently posted a 2% decline in North American organic beverage volumes. Its international demand remained robust. Coca-Cola also gained value share in North America's nonalcoholic ready-to-drink market.

Zero Sugar stayed the fastest grower, and margins widened

Coca-Cola Zero Sugar volume rose 16% worldwide. Volume in Coca-Cola branded drinks rose 5% overall. Water volume rose 8%, while sports drinks fell 3%. Coffee and tea volume was unchanged.

The operating margin widened to 33.4%, from 32.0% a year earlier. The comparable operating margin rose to 32.9%, from 31.9%. Revenue growth and favorable currency moves helped offset higher marketing investment.

The raise leans on the fourth quarter and an African sale

For the full year, Coca-Cola now expects organic revenue growth of at least 5%. It previously expected growth of about 5%. Organic revenue strips out currency swings and portfolio changes.

Comparable earnings growth guidance rose to at least 11%. The prior range was 9% to 10%. Free cash flow guidance rose to at least $13 billion, from about $12.4 billion. Free cash flow is operating cash flow minus capital spending.

The outlook carries a condition. It assumes the pending sale of the company's African bottling operations closes in the fourth quarter. That closing still needs regulatory approval.

The beat extends a strong run. Shares had rallied more than 30% this year into the report. The company had topped adjusted earnings estimates for 10 straight quarters before this report.

The home stall is also a change in trend. In the second quarter, global volume rose 5% and North America volume rose 3%. The global engine kept its pace this quarter. The home engine did not.

Two demand bets sit outside the quarter. KFC will replace PepsiCo with Coca-Cola drinks at its U.S. restaurants beginning in January. The company also plans limited testing of prebiotic-fiber versions of three zero-sugar drinks.

What remains unknown

What remains unknown is whether North America volume returns to growth in the holiday quarter. Also unknown is how much of the full-year raise depends on the African sale closing on time. What to watch is the fourth-quarter volume print, management's first 2027 commentary, and any update on the bottling sale. The verified record is clear on the quarter itself: global volume and a wider margin carried the beat, and management raised the year on that strength.