Coca-Cola (KO) released its fourth-quarter earnings on Tuesday, posting a net income of $1.97 billion. In addition, net sales rose 7% to $10.85 billion, beating expectations. For 2024, the company forecasted an organic revenue growth of 6% to 7%.

Yahoo Finance Reporter Brooke DiPalma joins the Live show to break down the latest earnings from Coca-Cola and what it could mean for the company moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

RACHELLE AKUFFO: Well, a refreshing taste for investors this morning. Shares of Coca-Cola edging higher in premarket trading. That's following the company's latest earnings results.

The beverage giant sales topping estimates in its fourth quarter, driven by firm demand and higher prices. Let's deep dive into these earnings with our very own Brooke DiPalma. Brooke, you're back with us. You spoke with Coca-Cola CFO John Murphy. What did he have to say?

BROOKE DIPALMA: Good morning, Rachelle. That's right, I spoke to him this morning, and he largely waited on some key trends that we're seeing that give us key insight into the state of the consumer right now. Let's kick things off with what we're seeing here in North America. He said the consumer here remains resilient after it took much sharper pricing in 2023.

He said that North America volume dropped as less people really bought water, sports drinks, coffee, and tea. But in addition to that, the overall basket continues to increase in pricing and that means that we're seeing that lower-income consumer yet again be a bit more value, cost conscious. But he said that because of their broad portfolio, they're able to come up with much more packed configurations that really allows these lower-income consumers or any consumer, really, here looking for value to have this sort of diversification, these different options that they can buy into.

Now number two here, he did say that moderation is very much so the name of the game in 2024. He said that after carrying over pricing that they took in 2023, they're expecting a much more normal environment here in the US as far as price hikes go for this year, but he did note that they continue to see hyperinflation in countries like Argentina and Africa. But a general trend that they're seeing is this moderation in the cost of commodities.

But a few key elements as far as agriculture commodities goes, well, we're still seeing some stickiness there. That means the price of sugar, the price of orange juice continues to edge higher globally. And one thing that he did note is those ongoing conflicts in the Middle East. He calls it a near-term challenge.

He noted that those conflicts did knock a point off a volume of our numbers in the fourth quarter. And he said that this continues to be something that they're going to watch continuing throughout 2024. So certainly lots of near-term headways, lots of challenges, but the North American consumer seems to continue to put up with those higher prices.

BRAD SMITH: And while we have you, Brooke, on this, and excellent takeaways from that conversation, you know, I wonder where in terms of the strength that they're seeing in their business, where that's also kind of trickling through to margins. Did they have anything to say about that and where profit is holding up strong?

BROOKE DIPALMA: Yeah, he said the profit is holding up strong. In addition to that, he really did say that because of the fact that they do have this broad portfolio, they're able to play with the consumer about what they want and where exactly they're looking at. And on the Street, they continue to be optimistic about this company.

Many analysts that I've spoken to in the recent weeks, whether it be about the Super Bowl or largely about PepsiCo and Coca-Cola earnings, many analysts continue to like Coca-Cola over PepsiCo, in fact. But among PepsiCo and Cola, they continue to stand out as the main two on the Street to look out for and watch in 2024, as consumers continue to seem to put up with this. And I'll continue to watch out. The call is underway and I'll keep a close eye on that as well.

RACHELLE AKUFFO: Indeed, appreciate you breaking that down for us. We will, of course, get more on Coca-Cola's earnings with Gerald Pascarelli coming up later on.