The profits of the American company Coca-Cola fell by 3% in the last quarter of 2023 to $1.98 billion, compared to $2 billion in the corresponding quarter in 2022, under pressure from the strength of the US dollar.
It is noteworthy that the company, like a number of American companies, faced boycott campaigns in the Middle East and a number of major Islamic countries, but the company did not indicate the impact of this boycott, nor did it show its revenues from the Middle East and North Africa region, but it merged the region with Europe and Africa.
The rise in the dollar puts pressure on the profits and sales of American companies, as the value of what they achieve in countries of the world in local currencies decreases when profits are transferred.
Stock performance
The stock fell 1.2% during trading yesterday, Tuesday, to $58.8 before returning to near levels at the beginning of the session at $59.35.
Earnings per share reached $0.46 in the last quarter of 2023, down from $0.47 recorded in the corresponding quarter of 2022, and 0.49 was expected by the market.
On the other hand, the company’s sales around the world increased by 7% in the last quarter of 2023 to $10.85 billion, compared to sales of $10.12 billion in the same quarter of 2022.
Market expectations were that its sales would grow to $10.68 billion in the last quarter of last year, and these are the company’s most prominent financial results:
- The company’s operating revenue increased 10% in the fourth quarter to $2.27 billion from $2 billion in the corresponding quarter of 2022.
- In the entire year of 2023, the company’s sales increased 3% to $18.52 billion from $18 billion in 2022.
- The company’s profits increased last year by 12% to $10.7 billion from $9.6 billion in the previous year.
- Earnings per share for the year were $2.47, up from $2.19.
Raise 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, anticipating flexibility in consumer demand for soft drinks, juices, and energy drinks, as well as rising prices.
Coca-Cola expected its revenues to grow between 10% and 11%, compared to previous expectations of an increase of between 8% and 9%.
It also expected an increase in annual basic earnings per share between 7% and 8%, compared to an increase of 5% and 6% earlier.
For 2024, Coca-Cola expects organic revenue growth of 6% to 7%, and comparable earnings per share to increase by 4% to 5%, and foreign exchange rates are likely to affect its profits and revenues for the full year.
