Coca-Cola Co. (KO:US), the world’s largest soft-drink maker, reported a 3.9 percent increase in third- quarter profit as sales volumes in Europe improved.
Net income rose to $2.31 billion, or 50 cents a share, from $2.22 billion, or about 48 cents, a year earlier, Atlanta-based Coca-Cola said today in a statement. Revenue advanced less than 1 percent to $12.3 billion, trailing the $12.4 billion average of analysts’ estimates compiled by Bloomberg.
Chief Executive Officer Muhtar Kent has been adjusting prices and introducing new products to cope with weaker demand in European nations facing a persistent debt crisis and slowing growth in China and Brazil. Sales volumes in Europe increased 1 percent, compared with a 4 percent drop in the second quarter.
“You had growth in all regions which is always good to see,” Jack Russo, an analyst with Edward Jones & Co. in St. Louis, said today in a telephone interview. “Overall, a good start to the earnings season.”
Coca-Cola fell (KO:US) 0.6 percent to $37.90 at the close in New York. The shares have gained 8.3 percent this year.
Excluding some items, profit was 51 cents a share, matching the average of 14 analysts’ estimates (KO:US) compiled by Bloomberg.
Global volume sales, a key measure of demand, rose 4 percent, helped by a 2 percent boost in North America. Consumer sentiment and the debt crisis in Europe may have reached bottom, Kent said today in an interview.
“We don’t feel that it’s going to get any worse, it’s stablizing,” Kent said. “Things aren’t good, people aren’t happy but things are looking to not get any worse.”
In emerging markets, Thailand posted a 19 percent volume gain while India reported a 15 percent increase. China’s 2 percent volume sales growth trailed the 6 percent pace set for the first three quarters combined.
“As we look ahead to the next six months, it is reasonable to expect that China’s ongoing economic slowdown may have a short-term effect on our industry and on our business,” Kent said during a conference call.
Coca-Cola’s adjusted gross margin was 60.3 percent, slightly higher than the 60.2 percent estimated by Herzog and John Faucher, an analyst with JPMorgan Chase & Co.
Commodity costs this year will rise by about $225 million from last year, according to the statement. That is less than the $300 million the company forecast on July 17.
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