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Ram0n C0keah0lic
02-13-2008, 03:00 PM
Coca-Cola Net Climbs on Soda Sales in China, Mexico (Update4)

By Duane D. Stanford

Feb. 13 (Bloomberg) -- Coca-Cola Co., the world's largest soft-drink maker, said fourth-quarter profit increased on higher sales of soda in Asia and Latin America and Vitaminwater in the U.S.

Net income rose 79 percent to $1.21 billion, or 52 cents a share, from $678 million, or 29 cents, a year earlier when its largest bottler wrote down the value of North American operations, Coca-Cola said today in a statement. Excluding restructuring costs, profit beat estimates by 3 cents.

Coca-Cola sold more soda in China and Mexico and benefited from the dollar's decline against other currencies. Chief Executive Officer Neville Isdell promoted no-calorie Coca-Cola Zero and Vitaminwater to counter waning U.S. demand for sugary soda and narrow the gap with PepsiCo Inc. and Nestle SA in the non-carbonated drinks market.

``This is exactly why you hold consumer staples in this environment,'' said Jason Pride, director of research at Haverford Investments. The results were ``out of the ballpark relative to analysts' expectations.'' The Radnor, Pennsylvania- based firm manages $6 billion including Coca-Cola shares.

Global sales on a volume basis climbed 5 percent, Coca- Cola said, driven by gains in China, India, Turkey, and in established markets including Latin America and Africa. Acquisitions, primarily Glaceau Vitaminwater, contributed 1 percentage point of that growth.

Volume increased 6 percent the previous three quarters.

Revenue climbed 24 percent to $7.33 billion, the Atlanta- based company said.

Share Performance

Coca-Cola fell 33 cents to $59.59 at 10:29 a.m. in composite trading on the New York Stock Exchange. The stock gained 4.4 percent the past week before today, rising in five straight trading sessions.

Excluding restructuring costs, Coca-Cola earned 58 cents a share. Eleven analysts surveyed by Bloomberg estimated average profit of 55 cents. They predicted sales of $6.88 billion.

Volume sales of soda, which account for about 80 percent of global revenue, increased 4 percent in the quarter, driven by Coca-Cola, Fanta, Sprite and Coca-Cola Zero outside North America.

``Sparkling beverages provide the oxygen to our business,'' Chief Operating Officer Muhtar Kent told analysts on a conference call.

Soda volume in North America fell 2 percent.

Global non-carbonated beverage volume gained 11 percent on Dasani bottled water, Powerade sports drink and Minute Maid juices, Coca-Cola said.

Earnings Growth

Isdell said last year that he expects annual earnings per share to grow by as much as 9 percent. He told the German magazine Capital last month that sales volume would increase by 2 percent a year in the U.S. and more abroad.

Volume in Japan and North America, two of Coke's most profitable markets, gained 1 percent.

Coca-Cola gets almost three-quarters of its revenue from outside the U.S., while PepsiCo generates about 40 percent of sales overseas.

The dollar's decline against foreign currencies during the quarter contributed 8 percentage points of growth to Coca- Cola's sales, higher than the 5.5 percentage points estimated by William Pecoriello, an analyst at Morgan Stanley in Purchase, New York.

The dollar averaged 10 percent less in the quarter against the Federal Reserve's basket of currencies than a year earlier.

Coca-Cola Zero

Sales of soda in the U.S., Coca-Cola's largest market, have fallen in volume since 2005. The beverage maker is marketing Coca-Cola Zero, which it says tastes similar to Coca- Cola Classic, to young men who have moved to sports drinks and other non-carbonated beverages with fewer calories.

``They are talking about getting more drinkers into the cola category, which is great, with this Coca-Cola Zero,'' said Mariann Montagne, an analyst with Thrivent Asset Management in Minneapolis. Montagne's firm manages $70 billion in assets, including Coca-Cola shares.

Coca-Cola's Powerade sports drink and Nestea-brand bottled teas trail PepsiCo's Gatorade and Lipton bottled teas in sales, according to Beverage Digest.

Coca-Cola bought Energy Brands Inc.'s Glaceau Vitaminwater for $4.1 billion last year. The fourth quarter was Coca-Cola's first full period selling Vitaminwater.

``They're really putting a lot of money behind this Vitaminwater,'' Walter Todd, who helps manage $800 million in assets for Greenwood Capital Inc. in South Carolina, said in an interview on Bloomberg Radio ``I think Coke's doing the right thing by trying to diversify away from the soft drinks.''

Coca-Cola, which controls one-tenth of the world's bottled-tea market, agreed last week to pay $43 million for a 40 percent stake in Honest Tea Inc., the maker of low-calorie organic bottled tea.

PepsiCo reported last week a 17 percent increase in fourth-quarter sales to $12.3 billion on gains from Gatorade and Lipton bottled tea in the U.S. and Doritos snacks in China and India. Net income fell 31 percent because of a tax gain a year earlier.

popologist
02-14-2008, 01:12 PM
thanks, ramon. do we know if coke zero made the top ten in the US this year yet?

fusion
02-14-2008, 01:39 PM
Usually we see the official numbers in March.

popologist
02-14-2008, 07:52 PM
Usually we see the official numbers in March.


yeah. beveragedigest.com usually posts them.