Coca-Cola (KO - Get Report) posted stronger-than-expected third quarter earnings Tuesday and said solid demand for its Coke Zero brand supported North American revenues as a stronger U.S. dollar trimmed international sales growth.
Dow component Coca-Cola said earnings for the three months ending in September came in at 58 cents a share, 3 cents ahead of the consensus forecast and 16% higher from the same period last year. Group sales, Coke said, fell 9% to $8.2 billion but still topped the Street estimate of $8.16 billion. Organic sales, Coke said, rose 6%, while volumes rose 2%, with the company citing "double-digit volume growth of Coca-Cola Zero Sugar across all groups."
"We continue to be encouraged by our performance year-to-date as we accelerate our evolution as an even more consumer-centric, total beverage company," said CEO James Quincey. "The recent leadership appointments are intended to help accelerate the transformation of our company."
Coca-Cola shares were marked 0.88% lower at the opening bell and changing hands at $45.88 each, a move that trims the stock's year-to-date advance to around 2% and value the Atlanta, Ga.-based icon at just under $200 billion.
Coke also said earnings were impacted by an 8% currency headwind owing to the strength of the dollar. The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, rose 0.7% over the three months ending in September and 1.33% against the European single currency.
Coke also said its $5 billion purchase of the Costa brand of coffee stores, the world's second largest behind Starbucks Corp. (SBUX - Get Report) , from U.K. pub and hotel operator Whitbread plc (WTBDY) would close sometime in the first half of 2019.
The deal, which will see Coca-Cola pay around 16.4 times Costa's full-year operating earnings, inferring an enterprise value of £3.9 billion ($5 billion) has been fully-approved by the Whitbread board but is subject to the agreement of the company's shareholders, who are set to receive a "significant" portion of the cash from the deal.
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