Bloomberg News

Coca-Cola Profit Tops Estimates

April 17, 2012

A shopper walks past Coca-Cola Co. beverages displayed on shelf in a grocery store in Atlanta, Georgia. Photographer: Chris Rank/Bloomberg

A shopper walks past Coca-Cola Co. beverages displayed on shelf in a grocery store in Atlanta, Georgia. Photographer: Chris Rank/Bloomberg

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.

Coca-Cola rose (KO:US) 2.1 percent to $73.95 at the close in New York. The shares have gained 5.7 percent this year, while PepsiCo Inc. (PEP:US) is little changed.

Global Pricing

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.

To contact the reporter on this story: Duane D. Stanford in Atlanta at dstanford2@bloomberg.net

To contact the editor responsible for this story: Kevin Orland at korland@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • KO
    (Coca-Cola Co/The)
    • $41.93 USD
    • -0.33
    • -0.79%
  • PEP
    (PepsiCo Inc)
    • $89.74 USD
    • -0.36
    • -0.4%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus