The Coca-Cola Company (KO – Free Report) reported better-than-expected fourth-quarter 2017 results, ending the year on an impressive note. Despite reporting flat soda volumes, the cola giant gained from its growing beverage portfolio and re-structuring efforts. Cost-cutting initiatives led by the refranchising of its low-margin bottling operations helped it to come up with better numbers.

Coca-Cola’s shares have rallied 2.9% in the pre-trading session following the earnings release.

Earnings Beat

Fourth-quarter 2017 comparable earnings of the company were 39 cents per share, surpassing the Zacks Consensus Estimate of 38 cents.

Earnings also improved from the year-ago profit level of 37 cents, helped by ongoing productivity efforts.

Sales Beat

Revenues of $7.51 billion in the quarter surpassed the Zacks Consensus Estimate of $7.36 billion. However, net revenues declined 20% year over year due to the negative impact of structural items, marking the 11th consecutive quarterly decline. Acquisitions/divestitures and structural items had a 26% negative impact on revenues, partly offset by a 4% positive contribution of price/mix and concentrate sales growth of 1%. The structural changes primarily include the impact of bottler refranchising efforts.

Coca-Cola Company (The) Price, Consensus and EPS Surprise

Coca-Cola Company (The) Price, Consensus and EPS Surprise | Coca-Cola Company (The) Quote

Volume and Pricing

Coca-Cola’s total unit case volume remained unchanged (similar to the preceding quarter). Emerging and developing markets saw some improvements in unit case volume. However, volumes showed no growth during the quarter in developed markets. Meanwhile, North America volume grew 1%.

Category Cluster Performance: Sparkling beverage unit case volume remained unchanged. Juice, dairy, and plant-based beverages witnessed 2% decline (versus 1% growth in the preceding quarter). Water, enhanced water, and sports drinks were up 2% (versus down 1% in Q3), and Tea and Coffee was up 2% (compared with 1% growth in Q3).