Coca-Cola on Friday reported quarterly revenue that topped analysts' expectations as more customers are drawn in by healthier options, like Zero Sugar soda and smaller size cans.
Shares of the company rose 2.5% in premarket trading.
"Our performance gives us confidence that our strategies are taking hold with our consumers, customers and system," CEO James Quincey said in a statement.
Here's what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 56 cents, adjusted, vs. 56 cents expected
- Revenue: $9.5 billion vs. $9.4 billion expected
Coke reported fiscal third-quarter net income of $2.6 billion, or 60 cents per share, up from $1.8 billion, or 44 cents per share, a year earlier.
Excluding impairment charges, gains from the sale of a New York building, and other items, the beverage giant earned 56 cents per share, in line with the 56 cents per share expected by analysts surveyed by Refinitiv.
Net sales rose 8% to $9.5 billion, topping expectations of $9.4 billion. Organic revenue grew by 5%, helped by higher prices and customers buying more expensive drinks.
As soda consumption declines in the U.S., Coke has been driving sales by focusing on drinks with less sugar and smaller packaging. Coke Zero Sugar once again saw double-digit volume growth. Its 7.5-ounce mini cans of soda grew by 15%, Quincey told analysts on the conference call. Minute Maid and juice brand Simply also saw strong performance in the company's home market. North American organic revenue grew by 3% during the quarter.
Quincey said that the company plans to address weaker performance in its water brands. As more consumers rethink their use of plastic, bottled water's growth has slowed. Coke is among the many companies thinking about how to make its packaging more environmentally friendly. For example, it plans to sell Dasani in aluminum cans and bottles.
Outside of the U.S., Coke has been leveraging recognition of its namesake brand to expand its drink portfolio. It has launched its Coca-Cola Plus Coffee drink in more than 20 markets. The company is also introducing its first energy drink under the Coca-Cola brand. Coke Energy is available in at least 25 countries and will be making its U.S. debut in January with additional zero-calorie options.
Quincey said that lower consumer sentiment in the U.K., driven by Brexit, has affected all British business. But that could be reversing soon, if U.K. lawmakers pass the deal Saturday.
"If it mercifully comes to an end, then yes I do think that sentiment will improve, maybe not overnight, but over time and hopefully going into 2020," Quincey said.
Coke once again updated its 2019 outlook for organic revenue. It now expects at least 5% growth after telling investors last quarter to expect organic revenue growth of 5%.
The company also released a partial forecast for fiscal 2020. It is expecting a 1% to 2% currency headwind next year to impact its comparable revenue and a 2% to 3% currency headwind to hit its operating income. CFO John Murphy said that the dollar is strengthening, rather than weakening as expected. The company will provide its full 2020 outlook in February.