Coca-Cola Shares Rise as Profit Tops Estimates

Coca Cola reported a better-than-expected quarterly profit Thursday, helped by double-digit volume gains in China, India and Eastern Europe, and its shares rose more than 5 percent.

Coke gets the majority of its sales from abroad, and that has helped it stay resilient over the last year as growth in emerging markets helped offset slowing sales in North America.

Coke shares rose nearly 4 percent in early morning trading.

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"Volume was better than I expected it would be and the earnings were better,'' said Steve Dixon, portfolio manager of the Global Beverage Fund at New York-based Arnhold & S. Bleichroeder. Dixon's fund holds shares in Coke, the world's top soft-drink maker, and its rival PepsiCo.

"What really (stood) out to me was the consistency of the results across geographies and product lines, of course with the exception being North America,'' he said.

Jeff Chiu / AP

Coke said net income fell to $995 million, or 43 cents per share, in its fourth quarter, from $1.21 billion, or 52 cents per share, a year ago.

Excluding items such as an impairment charge related to its largest bottler, Coke earned 64 cents per share. Analysts on average were expecting 61 cents, according to Reuters Estimates.

Revenue fell 2.7 percent to $7.13 billion, hurt by recent divestitures of some bottling assets and the strengthening U.S. dollar, which depresses the value of overseas sales. Worldwide sales by volume rose 4 percent.

Dixon noted that Coke's global scope increases its exposure to currency fluctuations, which could prove problematic if the dollar continues to rise.

Coke said the stronger dollar reduced quarterly operating income 9 percent and forecast a hit of 10 percent to 12 percent for the current first quarter.

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Volume of carbonated soft drinks such as Coca-Cola, Fanta and Sprite rose 2 percent in the quarter. Other drinks such as juice, bottled tea and water, rose 11 percent.

Volume fell 3 percent in North America. It rose 6 percent in Latin America, 2 percent in Europe, 9 percent in the Pacific region and 7 percent in the Eurasia and Africa segment.

The company said it was on track to deliver $500 million in annualized savings from productivity improvements by the end of 2011.

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