Coca-Cola Beats Estimates, Boosted by Emerging Market Sales
Coca-Cola reported first-quarter earnings on Wednesday that exceeded Wall Street's expectations, boosted by a rise in sales in Europe and emerging markets.
Coca-Cola posted quarterly earnings excluding items of 46 cents per share, versus 45 cents in the comparable year-ago period. Revenue, however, dipped to $11.04 billion, from $11.14 billion a year ago.
Analysts had expected Coca-Cola to report earnings per share of 45 cents on $10.94 billion in revenue,according to a consensus estimate from Thomson Reuters.
The soft drink giant cited strong volume growth in regions that included Thailand, India, Russia, Mexico and Brazil. Coca-Cola saw more modest growth in China and the U.S., where volumes rose by one percent in each market.
Total case volumes rose four percent, led by a 15 percent surge in its Eurasia and Africa business.
"I am pleased with our first quarter performance results, having once again delivered solid growth against the backdrop of a still uncertain global economy," said Muhtar Kent, chairman and CEO of Coca-Cola, in a statement. He added that the company was "on track" to meet its goals for the year 2020.
In a separate announcement, Coke ceded distribution territory to five independent U.S. bottlers, in what analysts say is an attempt to trim costs and streamline operations. Financial terms of the deal were not disclosed.
After the earnings announcement, the soft drink giant saw its shares jump by more than five percent in early trading on the New York Stock Exchage. (Click here to get the latest quotes for Coca-Cola.)
"The data flow had been fairly negative heading into the quarter so the slightly better volume, even within the context of flat price mix, should be viewed as encouraging," said J.P. Morgan analysts in a research note.
"Add in the improved sentiment surrounding de-consolidation, and it makes sense the stock is indicating up nicely today,in our view," the bank said. It added that the re-franchising of the bottling system was "not a big deal financially" but would help boost sentiment toward the company's operations.