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Ram0n C0keah0lic
04-16-2008, 12:54 PM
Coca-Cola Net Rises on Currency Gains, Mexico Sales
Bloomberg.com

April 16 (Bloomberg) -- Coca-Cola Co., the world's largest soft-drink maker, said first-quarter profit rose 19 percent on a declining U.S. dollar and increased soda sales in Mexico and India.

Net income climbed to $1.5 billion, or 64 cents a share, from $1.26 billion, or 54 cents, a year earlier, the Atlanta- based company said today. Excluding costs to write down assets, profit beat analysts' estimates by 4 cents a share.

Revenue rose 21 percent, with 9 percentage points of the increase coming from the dollar's decline against other currencies. Chief Operating Officer Muhtar Kent, who takes over as chief executive officer in July, may use the gains to further boost sales abroad, which account for about three-quarters of total revenue, to counter a slowdown in North America.

CEO Neville Isdell ``has lowered expectations, invested in marketing to drive better volume and better earnings growth, and that's paying off,'' John Faucher, an analyst with J.P. Morgan Securities Inc. in New York, said in an interview. ``The upside on this quarter based on currency is due more to the very diverse geographic nature of their business.''

Faucher, who expected the currency gain to account for about 6 percentage points of revenue growth, recommends buying the stock.

Analysts' Estimates

Excluding costs to write down assets, the soft-drink maker earned 67 cents a share in the three months ended March 28, compared with 13 analysts' average estimate of 63 cents in a Bloomberg survey.

Coca-Cola rose 1 cent to $60.95 at 11:14 a.m. in New York Stock Exchange composite trading. The stock fell less than 1 percent this year before today, compared with a 6.2 percent drop for PepsiCo Inc., the world's second-largest soda maker.

The soft-drink maker aims to bolster earnings per share faster than the 9 percent pace it forecast for the long-term, Chief Financial Officer Gary Fayard said on a conference call with investors and analysts from Wilmington, Delaware.

The amount executives will receive as a bonus depends on whether the company beats its targets, Fayard said.

China, India

Revenue growth has been fueled outside the U.S. International sales on a volume basis rose 7 percent in the quarter, including increases of at least 10 percent in China, India and Turkey. The volume of sales in Mexico rose 11 percent, bolstered by Coca-Cola and Jugos del Valle juices. Volume in North America remained little changed, the company said.

Coca-Cola promoted Minute Maid Pulpy, a watered-down orange juice, in China, and Mango-flavored Maaza in India.

Coca-Cola bought Energy Brands Inc.'s Vitaminwater, based in Queens, New York, for $4.1 billion last year to offset falling sales of Coca-Cola Classic in the U.S. The soft-drink maker marketed the vitamin-enhanced drink in Australia, its first international foray. Coca-Cola plans to expand Vitaminwater to the U.K. later this year.

The company will continue to invest in the U.S., Kent said.

Goldman Sachs Group Inc. said April 14 that the U.S. corporate earnings season has gotten off to an ``awful start'' as cash-strapped U.S. consumers grapple with higher energy costs and lower home values. The firm expects ``generally disappointing results'' that will drive the Standard & Poor's 500 Index lower.

The dollar averaged 12 percent less in the quarter against the Federal Reserve's basket of currencies than a year earlier.

To contact the reporter on this story: Duane D. Stanford in Atlanta at dstanford2@bloomberg.net

popologist
04-16-2008, 01:07 PM
the article i read also credited coke zero (especially in japan). :)

Pixel
04-16-2008, 09:03 PM
the article i read also credited coke zero (especially in japan). :)
I'll take the credit for that!

Ram0n C0keah0lic
04-16-2008, 10:59 PM
What I still don't understand is why the sales in North America are still dropping... is it because people is switching to healthy choices?, is it because Pepsi and CS have a really strong market share there?...

popologist
04-16-2008, 11:10 PM
What I still don't understand is why the sales in North America are still dropping... is it because people is switching to healthy choices?, is it because Pepsi and CS have a really strong market share there?...
pepsi's sales are falling faster than cokes, actually.

i think it's due to several things: (1) price--the price of soda has skyrocketed the last couple of years because of oil prices and corn prices, and (2) health--people are choosing healthier options instead (flavored waters, sports drinks, etc).

francoenergy99
04-17-2008, 01:14 AM
Cokes just better!

lordmadone
04-17-2008, 05:37 PM
People are switching to Alternative hydrating things..and Pepsi is the leader in the new age market..well according to many statistics..but in my region for PBG we keep growing over CCE..stole 3.5 market share in this area just so far!!

Ram0n C0keah0lic
04-17-2008, 08:38 PM
Amazing answers!

I wonder if the acquisition of vitaminwater will improve Coke sales in U.S. next quarter...