Tough second quarter for Coca-Cola

The second quarter of 2008 treated Coca-Cola poorly in the
U.S., according to statements released Thursday by the beverage giant and its
largest bottler.

U.S. volumes remained flat while international volumes rose
five percent – lifting the company’s worldwide volume growth to 3 percent – but
the company reported a 23 percent drop in profits as it took a one time charge
related to bottler Coca Cola Enterprises.

CCE posted a $3.17 billion loss that Chairman and CEO John
Brock attributed in a press release to a “significant decline in the North
American economy, coupled with unprecedented escalating commodity costs.”

Brock continued, adding that the bottler would raise prices
after Labor Day to offset costs, but Morgan Stanley Analyst Bill Pecoriello
said The Coca-Cola Company may do the same.

Pecoriello wrote a note to investors that said Coca-Cola is
likely to evaluate a hike on concentrate prices to offset volume lost from
price increases at the bottler level.