Coca-Cola Profit Down On Charges, But Volume Rises

by DrinkNetwork

Published on Thu Feb 12 20:53:34 2009

Coca-Cola Co. reported Thursday its earnings per share fell 17% in the fourth quarter on charges and a slump in North American volume.

Before the bell, Coke (KO) said that it earned $995 million, or 43 cents a share, down from $1.21 billion, or 52 cents a share, in the year-ago quarter. Excluding one-time items, earnings were 64 cents a share, a 10% rise.

The soft-drink giant said revenue for the quarter was $7.13 billion, compared to $7.33 billion in the year-ago period

However, total unit case volume, or the amount of all Coca-Cola drinks sold worldwide, rose 4%.

The average estimate of analysts polled by FactSet Research had been for Coca- Cola to earn 61 cents a share on revenue of $7.49 billion.

Volume in North America was down 3%, while international unit case volume rose 6%. Carbonated soft-drink volume was up 2%, while still-beverage unit case volume rose 11%.

Carbonated soft drinks remain popular in many foreign markets, especially emerging ones, but the category has been languishing in the U.S., forcing the company to expand its non-carbonated portfolio, both through acquisition and organic development.

In addition to its eponymous flagship brand and fizzy drinks like Sprite and Fanta, Coca-Cola also sells Vitamin Water, Dasani bottled water and Powerade.

International operations now represent over 80% of the company's operating income, and when volume growth is added to currency benefits, the overseas receipts can hold up the company's top and bottom lines, even during tough times at home.

Coca-Cola's results "exceeded our long-term growth targets despite a very challenging economic environment," Chief Executive Muhtar Kent said in the earnings report. "We gained volume and value share in most of our leading markets."

"While certainly not crisis-proof, as no company is, I do believe our global business model is relatively resilient, as we bring simple moments of pleasure to our consumers, nearly 1.6 billion times a day, for cents at a time," Kent said.

Shares of Coca-Cola, a component of the Dow Jones Industrial Average, were up almost 5% at $43.19 following the earnings report, rebounding from a 52-week low of $40 and change during the previous session. The Dow itself, however, was down nearly 200 points at 7,750.

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