Coca-Cola Co. (KO:US), the world’s largest soft-drink maker, reported first-quarter profit that topped analysts’ estimates, helped by pricing increases and demand in North America.
Net income rose 7.9 percent to $2.05 billion, or 89 cents a share, from $1.9 billion, or 82 cents, a year earlier, Atlanta- based Coca-Cola said today in a statement. Analysts projected 87 cents, the average of 14 estimates (KO:US) compiled by Bloomberg.
Chief Executive Officer Muhtar Kent has introduced smaller package sizes to attract price-conscious consumers as part of an effort to spur sales in North America, where the soft drink industry is in a seven-year decline. Beverage sales volume for the unit climbed 2 percent in the quarter, driven by demand for Powerade energy drinks and Dasani water, contributing to a 5 percent gain globally.
“Coca-Cola’s volume growth was very strong this quarter and despite commodity pressures and clear marketing reinvestment, they delivered strong profitability,” Ali Dibadj, a New York-based analyst for Sanford C. Bernstein & Co., said today in an e-mail. Dibadj rates the shares outperform, the equivalent of a buy.
Revenue advanced 5.9 percent to $11.1 billion, according to the statement. The company raised global pricing 3 percent in the quarter, outpacing last year’s 1.5 increase.
The North America unit, Coca-Cola’s largest, accounted for about 44 percent of global sales. The Pacific unit, the company’s second-largest region, boosted volume sales 8 percent, compared with 5 percent growth a year earlier. The division was helped by a 3 percent jump in Japan.
In emerging markets, India jumped 20 percent while Brazil increased 4 percent, as both outpaced gains in the first quarter a year earlier. China advanced 9 percent.
Gross margin narrowed to 61 percent from 62.5 percent a year earlier.
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