Earnings Recap: Coca-Cola, Spotify, Raytheon Report Solid Numbers

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As the earnings season unfolds, investors eagerly anticipate a crucial week ahead that promises to unveil fresh perspectives on corporate giants like Microsoft, Meta, Amazon, and more. Amid this anticipation, Tuesday witnessed an impressive start as Coca-Cola, Spotify, and Raytheon presented robust Q3 results, driving up their stock prices at the opening bell.

Coca-Cola’s Q3 Results

Shares of Coca-Cola (NYSE: KO) surged higher at the market open on Tuesday after the company reported better-than-expected earnings and revenue for Q3 2023 and raised its full-year guidance.

Coke, one of the world’s biggest beverage makers, reported adjusted earnings per share (EPS) of 74 cents in the third quarter, topping the consensus estimates of 69 cents. Revenue came in at $11.91 billion, while analysts were looking for $11.44 billion. Net sales grew 8% to $11.91 billion, excluding items.

Net income attributable to shareholders was reported at $3.09 billion, or 71 cents per share, up from $2.83 billion, or 65 cents per share, in the same quarter last year. When leaving out transaction gains, restructuring costs, and other items, Coca-Cola made 74 cents per share in the period. 

For the full fiscal 2023, Coke expects comparable EPS growth to be 7% to 8%, up from the previous guidance of 5% to 6%. 

The company’s shares were up 2.75% at the time of writing.

Spotify’s Q3 Results

On the same day, Spotify (NYSE: SPOT) also reported Q3 results that exceeded analysts’ estimates, driven by strong monthly active users (MAUs) and subscriber growth across all regions.

The Stockholm, Sweden-based streaming giant posted a Q3 operating income of 32 million euros ($34.08 million), marking its first quarterly profit since 2021. Gross margins rose to 26.4% in the quarter, up from 166 basis points in the year-ago period. 

Total revenue grew 11% to 3.36 billion euros, surpassing the consensus estimates of 3.33 billion.

The report’s highlight was the 26% growth in MAUs to 574 million in Q3, beating both Spotify’s guidance and analysts’ predictions of 565.7 million. 

For Q4, Spotify expects monthly listeners to hit 601 million, setting the company firmly on track to reach its goal of 1 billion users and $100 billion in annual revenue by 2030. 

Raytheon’s Q3 Results

In the meantime, aviation and defense giant Raytheon (NYSE: RTX) posted a loss of $984 million in Q3, compared to $1.4 billion profit in the year-ago period. The sharp decline comes as revenues slumped 21% year-over-year to $13.5 billion. 

According to the company, the revenue decline included the ramifications of the $5.4 billion one-time charge on the Pratt & Whitney engine issue related to “contamination” in the powdered metal used to produce the engine parts. Pratt & Whitney, a subsidiary of RTX, reported a $2.48 billion operating loss in the quarter. 

However, overall financial results remained solid. Raytheon posted Q3 adjusted profit of $1.25 per share, topping the consensus projection of $1.21. Adjusted revenue came in at $18.95 billion, up 12% from a year ago and ahead of analysts’ estimates of $18.59 billion. 

Raytheon also raised the outlook for full fiscal 2023 and now expects a free cash flow of $4.8 billion, up from the previous forecast of $4.3 billion. Full-year adjusted EPS is expected to be $4.98 to $5.02, while reported and adjusted sales are anticipated to hit $68.5 billion and $74 billion, respectively. 

Thanks to a “historic” demand across commercial aviation and defense, RTX also announced a substantial increase in its share repurchase program to $12.8 billion from $3 billion. The stock soared 6.25% at the market open.

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