Coca-Cola (KO, Financial) released its Q4 2024 earnings, showcasing impressive results with a 6.4% year-over-year revenue increase to $11.54 billion, surpassing market expectations of $10.67 billion. Organic revenue grew by 14%, driven by a 5% increase in concentrate sales and a 9% rise in prices. Despite a strong US dollar, effective hedging reduced foreign exchange impacts to 3%.
Emerging markets, including Latin America and the Middle East, outperformed mature markets, fueled by rapid economic growth. Health-oriented categories like tea, coffee, and water saw significant growth, with tea up 5% year-over-year. Coca-Cola's strategic pricing and packaging adjustments, such as introducing mini cans and recyclable packaging, helped maintain consumer loyalty in price-sensitive regions like North America.
AI integration played a crucial role in cost reduction and efficiency improvements. Coca-Cola's partnership with Microsoft led to AI-driven enhancements in product development, manufacturing, and marketing, boosting operating profit margins from 19% to 23.5%.
The company continued its tradition of increasing dividends, distributing $8.4 billion in 2024 and repurchasing $1.1 billion in shares, achieving a yield of approximately 4%. For 2025, Coca-Cola anticipates a 2%-3% EPS growth and a 5%-6% organic growth, slightly below expectations.
