A double beat on third-quarter earnings wasn’t good enough for the market.
Like a can of soda going flat, there was little fizz in Coca-Cola (KO -2.07%) stock on Wednesday. Investors traded out of it on news of third-quarter results, sending the share price down to close in excess of 2%. Even the lethargic S&P 500 index did better, closing barely over 1% below Tuesday’s level.
Slight beats in the third quarter
In the quarter, Coca-Cola booked net revenue of $11.9 billion, which was 1% down from the same period of 2023. By contrast, non-GAAP (generally accepted accounting principles) adjusted net income saw a rise of 4% to over $3.3 billion. On a per-share basis, the latter metric tallied $0.77.
Both headline numbers were slightly above the consensus analyst estimates. These predicted $11.6 billion for revenue, and an adjusted, per-share net income figure of $0.74, according to data compiled by Yahoo! Finance.
In the earnings release, Coca-Cola quoted CEO James Quincey as saying that the company’s performance shows that it “continues to demonstrate resilience in the face of a dynamic external environment.”
“We are encouraged by our year-to-date performance and our system’s ability to manage near-term challenges, while also remaining focused on long-term growth opportunities,” he added.
Investors were hoping for more
Coca-Cola also updated its full-year 2024 guidance. It believes its organic (non-GAAP, or adjusted) revenue will rise by 10% over the 2023 figure; this growth was 9% in the third quarter. As for adjusted net income growth, this should come in at 5% over the $2.69 the company earned last year.
None of Coca-Cola’s third-quarter figures were bad, certainly, but we’re currently in a market that’s expecting excellence. I don’t feel anyone should be discouraged by the monster company’s performance, particularly if they’re income investors — this Dividend King looks well on track to continue its ever-lengthening streak of dividend raises.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.