Coca-Cola profit rises as sales climb
Published 21/07/2010 | 16:05
Coca-Cola, the world’s largest soft-drink maker, posted a 16pc increase in second-quarter profit as North American sales volumes climbed for the first time since 2007.
Net income rose to $2.37bn, 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 2pc, compared with a 1pc decline a year ago.
The volume growth in North America 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.
Coca-Cola gained 98 cents, or 1.8pc, to $54.22 at 9:51am in New York Stock Exchange composite trading.
The stock has dropped 6.6pc this year before today, while rival Pepsi gained 6.5pc and the Standard & Poor’s 500 Index declined 2.8pc.
Coca-Cola’s growth outstripped PepsiCo’s in North America, where a drop in consumer confidence has escalated competition.
Pepsi posted a 1pc decline in North American volume in the second quarter excluding the effect of a distribution deal with Dr Pepper.
Global sales by drink volume grew 5pc at Coca-Cola, with the Eurasia and Africa unit showing the fastest growth at 10pc.
Coca-Cola used the football World Cup, hosted by South Africa, to stage its largest marketing campaign, covering 160 countries and attracting more customers.
European sales by drink volume fell 1pc, hurt by “ongoing challenges” in Southern and Eastern Europe, Coca-Cola said.
Volume growth in the Pacific region, which amounted to 6pc 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 4.9pc to $8.67bn. A year earlier, second-quarter profit at Coca-Cola was $2.04bn, or 88 cents a share.
Yesterday, New York-based Pepsi reported a 3.4pc 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.