The Coca-Cola Company is a famous multinational corporation headquartered in Atlanta. The company’s third-quarter revenue fell 9% as the coronavirus pandemic affected the demand for fountain soft drinks, Powerade, and Dasani. Nevertheless, the company topped earnings estimates, despite all challenges.
The quarter ended on September 25. Let’s have a look at the results to learn more about the situation. Interestingly, earnings per share surpassed expectations and the revenue reached $8.64 billion.
However, a net income of $1.74 billion or 40 cents per share fell from $2.59 billion or 60 cents per share, a year earlier.
Interestingly, excluding asset impairments, severance costs related to its restructuring plan, and other items, the Coca-Cola Company earned 55 cents per share. Importantly, this result surpassed expectations.
It is worth noting that, in the quarter net sales fell 9% to $8.65 billion, beating expectations of $8.36 billion. Interestingly, organic sales declined 6%. Moreover, unit case volume, which helps measure demand without the impact of pricing or foreign currency dropped 4%.
Coca-Cola and main findings
Notably, all four of Coke’s drink categories reported declines in unit case volume. However, sparkling soft drinks performed better than other categories, its volume fell only 1%. Demand for Coke Zero Sugar and trademark Coke drinks helped to support the category. Nevertheless, overall it was affected by the decline in the North American fountain business.
People should take into consideration that, juice, dairy, and plant-based drinks saw volumes shrink by 6%, hurt the pressure in the Asia Pacific and Latin America. Unfortunately, the unit case volume of water enhanced water and sports drinks declined by 11%. Interestingly, tea and coffee suffered the biggest losses, with demand dropping 15%. The major contributing factor was the company’s Costa cafes.
It is worth noting that, the Coca-Cola Company noted quarter-over-quarter improvements in demand. The coronavirus pandemic continues to limit drink purchases at movie theaters, restaurants, as well as office buildings. However, at-home demand remains elevated. Interestingly, Coke’s away-from-home business is larger than Pepsi’s.
The company is undergoing a transformation. For example, the company decided to discontinue drinks like Tab. It was not popular and don’t have a serious opportunity for growth. Interestingly, at the end of the process, the company plans to slash the number of master brands by 50% to about 200. The Coca-Cola Company did not provide an updated outlook for the remainder of 2020. The company pulled its forecast in March due to the uncertainty of the impact of the pandemic. Companies around the world are working hard to adapt to the new reality. The company based in Georgia has the potential to reach this goal.