Coca-Cola profits bubble up
Thursday, 22 July 2010
Coca-Cola Company, the world's largest soft-drink maker, posted a 16 per cent increase in second-quarter profit as North American sales volumes climbed for the first time since 2007.
Net income rose to $2.37 billion, or $1.02 a share, the company said today in a statement. Excluding some items, profit was $1.06, compared with the $1.03 average of estimates compiled by Bloomberg. Beverage volume in North America advanced 2 per cent, compared with a 1 per cent decline a year ago.
The volume growth in North America, Coca-Cola's largest market, exceeded predictions from analysts such as Mark Swartzberg at Stifel Nicolaus & Co. Coca-Cola benefited from marketing tied to the 2010 World Cup and from surging sales of sports beverages like Powerade.
The results "attest to the company's ability to produce healthy growth even in the current macro environment," Swartzberg said in a research note today. The analyst, based in Florham Park, New Jersey, recommends buying Coca-Cola shares.
Coca-Cola gained 98 cents, or 1.8 per cent, to $54.22 at 9:51 a.m. in New York Stock Exchange composite trading. The stock has dropped 6.6 per cent this year before today, while rival PepsiCo Inc. gained 6.5 per cent and the Standard & Poor's 500 Index declined 2.8 per cent.
Coca-Cola's growth outstripped PepsiCo's in North America, where a drop in consumer confidence has escalated competition. PepsiCo posted a 1 per cent decline in North American volume in the second quarter excluding the effect of a distribution deal with Dr Pepper Snapple Group Inc.
Global sales by drink volume grew 5 per cent at Coca-Cola, with the Eurasia and Africa unit showing the fastest growth at 10 per cent. Coca-Cola used the World Cup soccer tournament, hosted by South Africa, to stage its largest marketing campaign, covering 160 countries and attracting more customers.
European sales by drink volume fell 1 per cent, hurt by "ongoing challenges" in Southern and Eastern Europe, Coca-Cola said. Volume growth in the Pacific region, which amounted to 6 per cent in the quarter, was hampered by bad weather in parts of China and Japan, according to the beverage maker.
"The state of the global economy remains uncertain in many regions, affected by ongoing deficit concerns in Europe, recent downward revisions to China's economy and weakened consumer confidence," Chairman and Chief Executive Officer Muhtar Kent said in the statement.
Total sales advanced 4.9 per cent to $8.67 billion. A year earlier, second-quarter profit at Atlanta-based Coca-Cola was $2.04 billion, or 88 cents a share.
Yesterday, Purchase, New York-based PepsiCo reported a 3.4 per cent drop in second-quarter profit on costs to integrate its largest bottlers. Coca-Cola has said it plans to finish its purchase of the North American assets of its largest bottler in October, aiming to improve beverage profit and distribution.
Net income rose to $2.37 billion, or $1.02 a share, the company said today in a statement. Excluding some items, profit was $1.06, compared with the $1.03 average of estimates compiled by Bloomberg. Beverage volume in North America advanced 2 per cent, compared with a 1 per cent decline a year ago.
The volume growth in North America, Coca-Cola's largest market, exceeded predictions from analysts such as Mark Swartzberg at Stifel Nicolaus & Co. Coca-Cola benefited from marketing tied to the 2010 World Cup and from surging sales of sports beverages like Powerade.
The results "attest to the company's ability to produce healthy growth even in the current macro environment," Swartzberg said in a research note today. The analyst, based in Florham Park, New Jersey, recommends buying Coca-Cola shares.
Coca-Cola gained 98 cents, or 1.8 per cent, to $54.22 at 9:51 a.m. in New York Stock Exchange composite trading. The stock has dropped 6.6 per cent this year before today, while rival PepsiCo Inc. gained 6.5 per cent and the Standard & Poor's 500 Index declined 2.8 per cent.
Coca-Cola's growth outstripped PepsiCo's in North America, where a drop in consumer confidence has escalated competition. PepsiCo posted a 1 per cent decline in North American volume in the second quarter excluding the effect of a distribution deal with Dr Pepper Snapple Group Inc.
Global sales by drink volume grew 5 per cent at Coca-Cola, with the Eurasia and Africa unit showing the fastest growth at 10 per cent. Coca-Cola used the World Cup soccer tournament, hosted by South Africa, to stage its largest marketing campaign, covering 160 countries and attracting more customers.
European sales by drink volume fell 1 per cent, hurt by "ongoing challenges" in Southern and Eastern Europe, Coca-Cola said. Volume growth in the Pacific region, which amounted to 6 per cent in the quarter, was hampered by bad weather in parts of China and Japan, according to the beverage maker.
"The state of the global economy remains uncertain in many regions, affected by ongoing deficit concerns in Europe, recent downward revisions to China's economy and weakened consumer confidence," Chairman and Chief Executive Officer Muhtar Kent said in the statement.
Total sales advanced 4.9 per cent to $8.67 billion. A year earlier, second-quarter profit at Atlanta-based Coca-Cola was $2.04 billion, or 88 cents a share.
Yesterday, Purchase, New York-based PepsiCo reported a 3.4 per cent drop in second-quarter profit on costs to integrate its largest bottlers. Coca-Cola has said it plans to finish its purchase of the North American assets of its largest bottler in October, aiming to improve beverage profit and distribution.