Beverage giant Coca-Cola Co KO reported Thursday morning with third-quarter results that came in better than expected, sending the stock higher.
Coca-Cola Q3 Earnings Recap: Coca-Cola said it earned 55 cents per share in the third quarter on revenue of $8.7 billion. This compares favorably to the Street's estimates of 46 cents per share and revenue of $8.35 billion.
Global unit case volume was down 4% in the quarter, but this marks a continued improvement since July.
Coca-Cola said it continues to see an "elevated level" of at-home sales, but any momentum is more than offset by the loss of sales at restaurants and other away-from-home channels.
The company said it is "pleased" with the continued improvement, but the "ultimate impact on its near-term results is unknown." Coca-Cola said its balance sheet remains "strong," and management has confidence in its liquidity position at this time.
BofA's Takeaways On Coca-Cola: BofA Securities analyst Bryan Spillane named six main takeaways from Coca-Cola's quarterly report:
- Revenue was $127 million, ahead of expectations, while the organic sales decline of 6% was better than estimates of an 8.5% decline.
- Year-to-date concentrate sales are down 9% and lagging unit vase volume declines of 7%.
- Asia Pacific unit case volumes were down 4% in the quarter.
- Operating income of $2.629 billion was $342 million better than expected, as SG&A spending was $198 million lower than projected.
- Coca-Cola recorded $343 million related to severance costs due to strategic realignment initiatives.
- Equity income of $458 million was $169 million better than expected.
Coca-Cola's Q4 Update: Coca-Cola noted unit case volume for October is down by a low single-digit so far. Management expects a "more gradual" pace of recovery than it did in prior quarters.
Coca-Cola said it expects a 3% net currency revenue headwind and a 9% impact to operating income in the quarter.
Looking forward to 2021, the company expects to see minimal currency-related revenue and operating income headwinds.
KO Price Action: Coca-Cola shares were up 1.06% at $50.52 at last check Thursday.
Related Link: Molson Coors CEO Talks New Coca-Cola Partnership: 'A Really Strong Portfolio'
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