Coca-Cola shares hit a 52-week high after the company said Wednesday its quarterly profit rose a better-than-expected 13 percent on strong international sales, the weak dollar and a lower tax rate.
The world's largest beverage company said net income rose to $1.65 billion, or 71 cents per share, for the third quarter that ended Sept. 28, up from $1.46 billion, or 62 cents per share, a year earlier.
Analysts on average were expecting 68 cents per share, according to Reuters Estimates.
A 3 cent-per-share restructuring charge in the quarter was offset by a 3 cent-per-share gain, mostly from the sale of a portion of its Coca-Cola Amatil holdings, the company said.
Coke said it lowered its expected full-year tax rate to 22 percent from 22.5 percent, providing a 1 cent-per-share benefit in the quarter. The company forecast that its tax rate for 2008 would be between 22 percent and 22.5 percent.
Net operating revenue rose 19 percent to $7.69 billion, with contributions of 8 percentage points from acquisitions of certain bottlers, 6 points from higher sales of beverage concentrate, 4 points from the weak dollar, and 1 point from sales increases and a greater ratio of more expensive products.
The weak dollar boosts the value of sales in other currencies when they are converted to dollars for inclusion on the company's income statement.
Worldwide case volume rose 6 percent, with increases of 4 percent for carbonated drinks and 14 percent for noncarbonated beverages, such as Powerade, Dasani bottled water and Minute Maid juice.
Volume rose 1 percent in North America, the first quarter of growth here in five quarters. Volume of carbonated drinks such as Coca-Cola and Fanta fell 2 percent, but popularity of the newly launched Coca-Cola Zero helped it gain market share.
Volume grew more than 4 percent in Japan, but fell 2 percent in Europe, hurt in part by unfavorable weather in Western Europe. The company said it saw double-digit volume growth in some key developing markets, including China, Turkey, Russia and India.
Coca-Cola has increasingly relied on developing markets for growth since soft drink sales in North America have slowed as health-conscious consumers have cut down on sugary beverages.
Coke Zero has been the company's most notable product introduction in many years and analysts have said they see that success, as well as the recent acquisitions of Glaceau and Fuze, as evidence that Chief Executive E. Neville Isdell is succeeding in turning around the company.
Isdell was brought out of retirement in 2004 to lead the Atlanta-based company.
Morgan Stanley analyst William Pecoriello said Coke's stronger-than-expected volume growth and better-than-expected earnings bode well for continued stock gains.
Coke shares , which have have gained about 9 percent over the last three months. rose $1.02, or 1.7 percent, to $58.78 on the New York Stock Exchange.