Coca-Cola Tops Forecast on Solid International Sales
Coca-Cola reported a higher-than-expected quarterly profit Wednesday as the weak dollar boosted international sales, helping the world's largest soft drink maker offset flat sales volume at home.
The Atlanta-based company said quarterly net income was $1.50 billion, or 64 cents per share, for its first quarter, ended March 28, compared with $1.26 billion, or 54 cents pershare, a year ago.
Excluding 3 cents per share in restructuring charges and asset write-downs, Coke said it earned 67 cents per share.
Net operating revenue for the quarter, ended March 28, rose 21 percent to $7.38 billion, above the Reuters Estimate forecast of $6.90 billion. But it would have risen only 12 percent if not for favorable translations of euros and other strong currencies into dollars.
Bottler acquisitions and higher sales of drink concentrate each contributed five percentage points of revenue growth, while two percentage points came from price increases and a product mix that featured more higher-priced items.
Overall unit case volume rose 6 percent in the quarter, driven by a 7 percent gain in markets abroad. North American volume was flat, Coke said, blaming "challenges in the U.S. economy."
North American sales in the food-service and hospitality segment fell 4 percent as the faltering U.S. economy led many cash-strapped consumers to cut down on dining out.
Coke's international business, especially in emerging markets like China, India, Brazil and Turkey, has grown more important to investors in recent years as growth slows in mature markets like North America.
In the latest quarter, volume rose 3 percent in the European Union, 9 percent in Latin America, 10 percent in the company's Pacific Group and 13 percent in its Eurasia unit made up of India, Turkey, Russia and Eastern Europe. Volume fell 1 percent in Africa.
Sales volume of the company's carbonated soft drinks, which include Coca-Cola, Sprite and Fanta, rose 3 percent. Volume of noncarbonated beverages such as Dasani bottled water, Minute Maid orange juice and Glaceau vitaminwater rose 17 percent.
Coke shares were were up 81 cents at $61.75 in premarket trade, from Tuesday's close of $60.94 on the New York Stock Exchange.