Coca-Cola Q1 results bubble thanks to Diet Coke sales

On a non-GAAP basis earnings per share at Coca-Cola’s profit rose 8% to $0.47, outpacing forecasts for 46 cents of profit.

That was despite a 16% drop in net sales to $7.63bn after divesting its packaging operations; yet the company still beat the analyst forecast at $7.34bn and in non-GAAP organic terms sales were 5% ahead on the year earlier period.

Coca-Cola’s good results were mainly due to the growing volume of sales of Diet Coke in this first quarter, after the firm added four new flavours including Zesty Blood Orange and Twisted Mango.

Across all geographies and product categories, the company's case unit growth hit 3% in the first quarter of the year with 4% rise in soda drinks volume and 5% rise in its coffee and tea volume, possibly a sign that its bet on investing in low sugar beverages for healthy-minded consumers are paying off.

Sales of Coca Cola Zero Sugar were particularly robust, clocking in with double-digit gains.

Although there were issues impacting on the comparability of its results, its operating margins increased by more than 220 basis points. On a comparable basis they improved by 600 basis points, the company said.

Also on a non-GAAP basis, free cash flow over the quarter was higher by 5% to $339m thanks to reduced capital investment needs.

The company said it was on track to hit its full-year 2018 financial targets too.

James Quincey, President and CEO of The Coca-Cola Company: "We're encouraged with our first quarter performance as we continue our evolution as a consumer-centric, total beverage company. We have the right strategies in place and remain confident in our ability to achieve our full year guidance."