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The Coca-Cola Company (KO - Free Report) is expected to register top-line growth when it reports fourth-quarter 2022 numbers on Feb 14, before the opening bell. The Zacks Consensus Estimate for the company’s fourth-quarter revenues is pegged at $10.01 billion, suggesting 5.7% growth from the prior-year quarter’s reported figure.

For fourth-quarter earnings, the consensus mark is pegged at 45 cents, suggesting flat results from the year-ago quarter’s reported figure. The consensus mark has moved down 4.3% in the past 30 days.

The Zacks Consensus Estimate for the company’s 2022 revenues is pegged at $42.9 billion, suggesting 10.9% growth from the prior-year quarter’s reported figure. For 2022 earnings, the consensus mark for earnings is pegged at $2.48, suggesting growth of 6.9% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days.

We expect the company’s fourth-quarter total revenues to increase 1.5% year over year to $9,603.7 million and the bottom line to decline 2% to 44 cents per share. For 2022, we estimate revenue growth of 9.9% to $42,482.7 million and earnings per share growth of 6.6% to $2.47.

In the last reported quarter, the leading soft-drink behemoth delivered an earnings surprise of 7.8%. Its bottom line beat the Zacks Consensus Estimate by 8.8%, on average, over the trailing four quarters.

CocaCola Company (The) Price and EPS Surprise

CocaCola Company (The) price-eps-surprise | CocaCola Company (The) Quote
 

Key Points to Note

Coca-Cola’s performances in recent quarters have been benefiting from strategic transformation and ongoing recovery around the world. The company’s fourth-quarter performance is expected to have benefited from revenue growth across its operating segments, aided by an improved price/mix and an increase in concentrate sales. Underlying share gains in both at-home and away-from-home channels are also expected to have bolstered the performance.

The company’s volumes in the fourth quarter are expected to have benefited from the ongoing recovery in markets. Category-wise, the volume has been benefiting from growth in trademark Coca-Cola; sparkling flavors; the nutrition, juice, dairy, and plant-based beverages; and hydration, sports, coffee, and tea categories.

Coca-Cola’s fourth-quarter results are likely to reflect gains from innovations and accelerating digital investments. The company has been witnessing a splurge in e-commerce with the growth rate of the channel doubling in many countries. KO has been accelerating investments to build strong digital capabilities. The company has been consistently strengthening consumer connections and piloting various digital-enabled initiatives through fulfillment methods to capture the online demand, which is likely to have boosted fourth-quarter sales.

However, Coca-Cola has been witnessing pressures from higher supply-chain costs, including rising commodity input costs and transportation expenses. The pressures from input cost inflation and other costs are likely to have hurt the company’s performance in the fourth quarter.

Coca-Cola has been investing in its markets and brands to support sales growth with higher spending on consumer-facing activities. This has led to higher marketing investments in the past few quarters. Higher marketing spending and an increase in short-term incentives and stock-based compensation are expected to have led to increased selling, and general and administrative expenses in the fourth quarter.

On the last reported quarter’s earnings call, the company expected adverse currency rates to hurt the top and bottom lines in the fourth quarter. It expects a currency headwind of 8% on comparable revenues and 9% on comparable earnings per share for the fourth quarter.
 

Zacks Model

Our proven model conclusively predicts an earnings beat for Coca-Cola this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Coca-Cola has a Zacks Rank #2 and an Earnings ESP of +0.75%.

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