Coca-Cola exceeded expectations and improved its predictions for the rest of the year

On Tuesday, Coca-Cola Co. raised its annual forecasts, adding to competitor PepsiCo Inc. The multiple increases in prices have not yet reduced demand and are good for the top two makers of sweet carbonated beverages.

Coca-Cola exceeded estimates for earnings and revenue in the third quarter, causing its stock to rise by 2.3%.

Coca-Cola and PepsiCo products prevail in the global carbonated beverage market. That has encouraged the companies to increase prices this year, as they expect the decrease in demand to be the last thing to affect their products during the economic downturn.

Coca-Cola management says average selling prices jumped by 12% year-over-year in the third quarter, while sales rose by 4%.

Analyst Callum Elliott from Bernstein said that even with Coca-Cola and Pepsi's pricing actions, this sales growth is steadier than expected.

However, during a phone call about profits and losses, Coca-Cola executives sounded a warning about the signs of decreasing consumer purchasing power due to inflation, especially in Europe.

According to them, consumer demand in the region for cheaper private label brands in categories such as juices and bottled water is growing.

Coca-Cola has released smaller bottles and reduced the number of cans in multi-packs to keep prices more stable. This is the way the company has prepared itself for a more caring consumer. Chief Executive Officer James Quincey said this.

Coca-Cola earned 69 cents per share in the third quarter on net income of $11.1 billion. According to IBES data from Refinitiv, analysts had expected earnings of 64 cents per share on revenue of $10.52 billion.

Previously, the company's forecast for growth in revenue in 2022 was 12-13%. The company now expects revenue growth of 14-15%. The forecast for full-year adjusted earnings per share growth was raised from 5%-6% to 6%-7%.