Coca-Cola reported adjusted earnings of 58 cents per share on net income of $1.8 billion for the third quarter, up from $1.45 billion of net income for the same period last year.
Analysts had forecast earnings per share of 55 cents per share and revenue of $8.17 billion. Reported revenue was $8.25 billion, down 9% year-over-year.
The company said it saw double-digit sales growth for its Coca-Cola Zero Sugar product, while sales of sparkling soft drinks grew 2%. It increased prices in North America in response to higher import costs and higher transportation costs.
“We had a solid quarter we’re on track to close out the year for our guidance,” Chief Executive Officer James Quincey said on the earnings conference call.
Sales of water and of sports drinks grew 5%, mostly due to China and Mexico. Sales of juice, dairy, and plant-based beverages fell 3%. A strong U.S. dollar hurt overseas sales, the company said.
“Overall, we are impressed with [Coke’s] ability to deliver a strong and balanced topline, suggesting that its refranchising and portfolio transformation are paying off,” Wells Fargo analyst Bonnie Herzog wrote in a note to clients.
During the quarter, Coca-Cola agreed to buy the U.K. coffee shop company Costa for $5.1 billion, one of its largest acquisitions ever, saying the deal will give it “the capabilities to build a global coffee platform.” The deal is expected to close in the first half of 2019.
The company also affirmed its guidance for 2018 of adjusted earnings per share of 8% to 10% and reiterated organic revenue growth (stripped of foreign currency rates) of 4% for the full year.
“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,” Quincey said. “The recent leadership appointments are intended to help accelerate the transformation of our company.”
Quincey downplayed reports the company was exploring cannabis-infused drinks, saying it did not have plans at this stage to enter the market.
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