The profits of American company Coca-Cola declined by 3% in the last quarter of 2023 to $1.98 billion compared to $2 billion in the previous quarter in 2022, under pressure from the strength of the US dollar.
The company, like many American corporations, faced boycott campaigns in the Middle East and several major Islamic countries. However, Coca-Cola did not mention the impact of these boycotts. Its revenues from the Middle East and North Africa were not disclosed, but the region was consolidated with Europe and Africa.
The rising dollar is putting pressure on the profits and sales of American companies, as the value of what they earn in foreign countries in local currencies decreases when converting profits.
Stock Performance
The stock fell by 1.2% during yesterday’s Tuesday trading to $58.8 before rebounding near the session’s start levels at $59.35.
Earnings per share reached $0.46 in the last quarter of 2023, down from $0.47 recorded in the same quarter of 2022, with an expected $0.49 by the market.
On the other hand, the company’s global sales increased by 7% in the last quarter of 2023 to $10.85 billion compared to $10.12 billion in the same quarter of 2022.
The market had expected its sales to grow to $10.68 billion in the last quarter of the previous year. These are the company’s financial highlights:
- The company’s operating revenues increased by 10% in the last quarter to $2.27 billion from $2 billion in the previous quarter of 2022.
- Throughout 2023, the company’s sales rose by 3% to $18.52 billion from $18 billion in 2022.
- The company’s profits increased by 12% in the past year to $10.7 billion from $9.6 billion in the previous year.
- Earnings per share for the year reached $2.47, up from $2.19.
Elevated Expectations
The company had raised its performance expectations for the entirety of 2023 by the end of the third quarter and for the second time during the same year, expecting resilience in consumer demand for soft drinks, juices, and energy drinks, as well as price increases.
Coca-Cola anticipated revenue growth between 10% and 11% from previous expectations with an increase ranging between 8% and 9%.
Additionally, it forecasted an increase in basic annual earnings per share by 7% to 8% compared to an earlier 5% to 6% increase.
For 2024, Coca-Cola anticipates organic revenue growth of 6% to 7%, a similar increase in earnings per share of 4% to 5%, and projects that foreign exchange rates may affect its profits and revenues for the entire year.
