Coca-Cola Earnings Increase 8.4%, Beating Analysts' Estimates
Coca-Cola Earnings Increase 8.4%, Beat Analysts’ Estimates
Daniel Acker/Bloomberg
Coca-Cola’s global sales by drink volume grew 5 percent, with a 2 percent increase in North America.
Coca-Cola’s global sales by drink volume grew 5 percent, with a 2 percent increase in North America. Photographer: Daniel Acker/Bloomberg
Coca-Cola Co. CEO Muhtar Kent
Nelson Ching/Bloomberg
Coca-Cola Co. Chief Executive Officer Muhtar Kent.
Coca-Cola Co. Chief Executive Officer Muhtar Kent. Photographer: Nelson Ching/Bloomberg
Coca-Cola Co., the world’s largest soft-drink maker, boosted third-quarter profit by 8.4 percent after winning more customers overseas and increasing North American sales volume for the second quarter in a row.
Net income advanced to $2.06 billion, or 88 cents a share, the Atlanta-based company said today in a statement. Excluding some items, profit was 92 cents, compared with the 89-cent average of estimates compiled by Bloomberg. The company also said it may repurchase $2 billion of its shares this year, up from the $1.5 billion announced previously.
Volumes in the Eurasia and Africa group grew 12 percent, making it the fastest-growing unit, as Coca-Cola launched new drinks in India and Russia. Coca-Cola, led by Chief Executive Officer Muhtar Kent, also boosted North American sales volume 2 percent, the second such increase since 2007. North American volume dropped 2 percent last year.
“The stabilization in North America is a sign consumers are willing to make impulse purchases of soft drinks again,” Philip Gorham, a senior equity analyst for Morningstar Inc. in Chicago, said today in a telephone interview. “It shows the environment is beginning to thaw.” Gorham rates the shares as “fairly valued.”
The shares rose 34 cents to $60.34 at 4 p.m. in New York Stock Exchange composite trading. That compared with a 1 percent drop in the Standard & Poor’s 500 Consumer Staples Index.
China Growth
Coca-Cola’s sales rose to $8.43 billion, beating the average of analysts’ estimates compiled by Bloomberg. Global sales by drink volume grew 5 percent, driven by brand Coca-Cola. That compared with a 4 percent drop in the same quarter last year. China posted 12 percent volume growth while Japan grew 11 percent.
The 2 percent volume gain in North America matched that unit’s gain in the second quarter as the unit reconfigures package sizes, such as adding 99-cent bottles, and pricing strategies amid high unemployment. Sales for the unit grew 2 percent while operating income increased 16 percent.
Even in the depths of the U.S. financial crisis in 2009, Coca-Cola and its distributors invested $2.5 billion in marketing and supply chain improvements, Kent said. They will invest even more in 2010, he said.
“We’re not going to waste this crisis,” Kent, 57, said in a telephone interview today. “The brand metrics of Coca-Cola brands have never been better in North America.”
Last year’s third-quarter profit was $1.9 billion, or 81 cents a share.
On Oct. 7, PepsiCo, the second-biggest soft-drink company, reported profit of $1.22 a share, excluding some items, matching analysts’ estimates.
To contact the reporter on this story: Ian Thomson in New York at ithomson2@bloomberg.net; Duane D. Stanford in Atlanta at dstanford2@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at Rajello@bloomberg.net
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