Shares of Coca-Cola (KO +0.41%) fell as much as 2.5% on Tuesday, before recovering to a 1.5% decline on the day.
The iconic beverage company, which is also a core holding of Warren Buffett's conglomerate Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), reported earnings this morning. While the results and outlook weren't all bad, the mixed picture apparently wasn't enough to justify the stock's recent run-up at the start of the year.
NYSE: KO
Key Data Points
Coke's revenue misses, but earnings beat, and other positives
In the fourth quarter, Coca-Cola grew revenue by 2.6% to $11.8 billion, missing estimates, but adjusted (non-GAAP) earnings per share grew 6% to $0.58, beating expectations by $0.02.
Although revenue came up a bit short, growth on a constant-currency basis was 5%, so the actual results, excluding currency movements, were better than the headline number. Coke also noted that it gained market share in both the quarter and the full year in the non-alcoholic ready-to-drink beverage space. And a third positive was that case volume increased across all geographies except Asia, where it remained flat. In recent years, Coke had seen some volume declines in North America, but had been able to offset that with price increases. So, to see volume up 1% in the North America region was a positive sign.
For 2026, management expects organic revenue growth of 4% to 5%, and adjusted EPS growth of 7% to 8%.
Image source: Getty Images.
Coca-Cola remains a dividend king for risk-off investors
These weren't bad numbers by any means for Coke, and the stock reaction may have been due to it having run up into earnings. Coke's stock had already appreciated 11.5% on the year before today's report, which is a strong one-month run, so perhaps investors took the less-than-perfect numbers as a reason to take profits.
Shares now currently trade at 23.8 times 2026 earnings estimates, which is not that demanding for a best-in-class consumer staple stock that appears to be executing well. Should the economy dip into a downturn, the all-weather Coca-Cola drink portfolio should remain resilient, as the company has raised its dividend for 63 straight years.
