The Coca-Cola Co (NYSE: KO) reported strong third-quarter numbers on Wednesday morning, reasserting its dominant position in the struggling carbonated beverage business.
Coca-Cola management confirmed the company is gaining market share from rivals such as Dr Pepper Snapple Group ( DPS), which reported a third-quarter revenue miss on Wednesday.
Coca-Cola reported adjusted earnings per share of 50 cents on revenue of $9.08 billion. Both numbers topped consensus analyst estimates of 49 cents and $8.72 billion, respectively.
Coca-Cola also reaffirmed its full-year financial outlook and said its organic core revenues grew by 4 percent. Analysts were expecting only 3.4 percent growth.
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Total unit volume on the quarter was flat compared to a year ago, but pricing was up 3 percent.
Coca-Cola said it gained market value share in total nonalcoholic ready-to-drink beverages. The company also said it gained or maintained market share in sparkling soft drinks, juices, sports drinks and ready-to-drink tea.
“Our performance reflects the strength of an organization that is focused on delivering against its financial commitments while also making substantial structural and cultural changes,” Coca-Cola CEO James Quincey says.
Dr Pepper Snapple wasn’t quite as fortunate in the third quarter. The company reported core EPS of $1.10 on revenue of $1.74 billion. Both numbers fell short of consensus analyst expectations of $1.16 and $1.76 billion, respectively.
Management said it expects full-year core EPS in a range between $4.50 and $4.57. The company is experiencing the same stagnant U.S. beverage trends that plagued PepsiCo ( PEP) when it reported earnings earlier this month. Dr Pepper Snapple reported flat bottler case sales volume growth in the third quarter. Carbonated soft drink volume was down 1 percent, and U.S. and Canada sales volumes were flat. Dr Pepper Snapple stock traded down by more than 6 percent Wednesday morning.
KO stock was down 0.3 percent following its report. Wells Fargo analyst Bonnie Herzog says Coca-Cola’s quarter was nothing for investors to get excited about.
“We are encouraged by positive momentum in many international markets,” Herzog says, according to TheStreet. “However, with flat/negative unit case volume growth for over a year, work clearly still remains to drive more balanced revenue growth going forward.”
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Coca-Cola and PepsiCo both beat earnings estimates in the third quarter. But for long-term investors, price hikes and mix shifts are poor substitutes for unit volume growth.
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The Coca-Cola Co Is the Best of the Soda Stocks (KO) originally appeared on usnews.com
