Coca-Cola (KO) Tops Q3 Estimates as Volume Grows Outside North America

Coca-Cola (KO) reported third-quarter revenue of $13.38 billion, up 7% year on year, beating the $12.92 billion analysts expected, according to LSEG data cited by CNBC. Comparable earnings, which exclude one-off items, were 91 cents a share, up 11% and ahead of the 88-cent forecast. The results came out before trading opens; the shares closed Monday at $92.70, up 32.6% this year.

What stood out

Coke sold more drinks almost everywhere except its home market. Unit case volume, a count of drinks sold to consumers, rose 5%, led by India, China, Mexico and Brazil, the company said. Volume grew 6% in Asia Pacific, 6% in Latin America and 5% in Europe, the Middle East and Africa, but was flat in North America, where growth in Coca-Cola itself was offset by a decline in its water, sports, coffee and tea category.

Revenue grew faster than volume. Concentrate sales, what Coke sells to its bottlers, rose 7%, running ahead of volume because of the timing of shipments, and price/mix added 1 point as price increases outweighed a less favorable mix. Among brands, Coca-Cola Zero Sugar volume grew 16% and Diet Coke 6%. The comparable operating margin rose a full point, to 32.9%.

“Our results this quarter demonstrate our system’s sustained momentum, giving us confidence in our updated full year guidance,” Chief Executive Henrique Braun said in the results release.

The outlook

Coke raised its full-year targets for the third straight quarter, CNBC and Quartz reported. It now expects organic revenue, which strips out currency moves, acquisitions and divestitures, to grow at least 5%, up from about 5%. It expects comparable EPS to grow at least 11%, up from 9–10%, including about 3 points of help from currency, and free cash flow of at least $13.0 billion, up from about $12.4 billion.

Coke will give 2027 guidance with its fourth-quarter results. For now it flagged a headwind of about 8% to next year’s comparable revenue from acquisitions and divestitures, and a slight drag from currency; its forecasts assume the pending sale of its bottling operations in Africa closes this quarter, subject to regulatory approval.

Our take

The good: a beat on revenue and profit, a wider margin and a third raise to the outlook, with growth coming from many countries at once. The bad: flat volume in North America, its home market, and about 3 points of this year’s EPS growth comes from currency, a tailwind that turns into a slight headwind in 2027. What to watch next quarter is whether North American volume returns to growth.