Coke Earnings: Profits Up, But Sales Down

Experts are predicting a new marketing war between Coca-Cola Co. and PepsiCo, as the Atlanta-based soda giant reported it would increase its marketing budget significantly through 2015 as part of its fourth-quarter earnings call today.

Coke has reaped millions of dollars in cost savings from its acquisition of major bottlers including Coca-Cola Enterprises; now, to build share, it plans to apply many of those saved revenues behind advertising and promotion, according to a report on the company’s earnings call published in the Wall Street Journal.

Coke beat analysts’ expected earnings per share on solid global volume growth  and cost savings, but missed gross margin expectations, possibly due to commodity prices, according to Wells Fargo Analyst Bonnie Herzog.

Coke volume sales were up 3 percent, although some analysts expressed concerns that those increases were driven by unsustainable pricing increases.

PepsiCo has been cutting jobs and boosting marketing; it will announce its earnings on Thursday.