Coca-Cola Company (KO) - Get Report said Friday it sees improving operating income for this year, despite stiffer headwinds from a stronger U.S. dollar, as growth of its trademark soft drink, as well as zero-sugar and healthier options, drove solid third-quarter sales growth.
Coca-Cola said adjusted earnings for the three months ending on September 27 came in at 56 cents per share, down modestly from the same period last year and largely in-line with the Street consensus forecast. Group revenues were a bit firmer, rising 8% to $9.5 billion and topping analysts' estimates as Coca-Cola branded drinks, including Coke Zero, notched impressive international growth rates.
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Looking into the final months of 2019 Coca-Cola said its expects organic revenue growth of "at least 5%", a modest increase from its prior forecast, with full-year operating income growth of between 12% and 13% on a currency-neutral basis. Headwinds from a stronger U.S. dollar, which is trading around 3% higher from the same period last year on an index basis, will rise to between 8% and 9%, Coca-Cola said, up around 100 basis points from its second quarter estimate.
"Our performance gives us confidence that our strategies are taking hold with our consumers, customers and system," said CEO James Quincey. "We are positioning the company to create a better shared future for all of our stakeholders by delivering on our vision and growing sustainably."
Coca-Cola shares bounced 1.6% higher following the earnings release and were last trading at around $54.61 each. That would push its year-to-date gain to around 16%, a figure that would still trail the 19.6% advance for the broader S&P 500 benchmark.
Coke Zero, the drinks maker's sugar free soda, saw "double digit" sales growth, the company said, as its sparkling soft drinks grew 2%, lead by a 3% gain for traditional Coke around the world. Coke's sports drinks and water franchises saw 2% growth, while tea and coffee volume grew 4%.