AP News, July 17th, 2007
The Coca-Cola Co., the world's largest beverage maker, posted a 1 percent profit increase for the second quarter on a solid 19 percent gain in sales.
The results reported Tuesday beat Wall Street expectations when one-time items are excluded. But Coke's share slipped.
For the three months ending June 29, the Atlanta-based company said it earned $1.85 billion, or 80 cents a share, compared to a profit of $1.84 billion, or 78 cents a share, for the same period a year ago.
Excluding one-time items, Coca-Cola said it earned $1.98 billion, or 85 cents a share, in the second-quarter. On a comparable basis, analysts surveyed by Thomson Financial were expecting earnings of 82 cents a share in the quarter.
Revenue rose to $7.73 billion, compared to $6.48 billion reported a year earlier.
For the first half of the year, Coca-Cola said it earned $3.11 billion, or $1.34 a share, compared to a profit of $2.94 billion, or $1.25 a share, for the same period last year. Six-month revenue rose 18 percent to $13.84 billion from $11.70 billion a year earlier.
Total unit case volume increased 6 percent in the second-quarter. However, unit case volume in the company's key North America unit declined 2 percent in the quarter.
"Of course, I'm not satisfied with these results," Chief Operating Officer Muhtar Kent said of North America in a conference call with investors and analysts.
Coca-Cola's largest market is North America, which provides roughly 27 percent of the company's overall unit case volume.
Coca-Cola shares fell 12 cents to $53.73 in morning trading.
Kent said that while Coca-Cola knows there "will be bumps," it is working on the challenges it faces in North America and believes the situation in that market will improve in the future.
"Our actions in the quarter clearly reflect our commitment to the North America business," Kent said.
Chief Executive Neville Isdell said Coca-Cola's $4.1 billion purchase of Vitaminwater maker Glaceau, also known as Energy Brands, will help the company's efforts at improving its business in North America. The deal to buy Glaceau, announced May 25, was completed last month.
Coca-Cola said its international operations recorded 9 percent unit case volume growth in the quarter, with solid sales in several countries including China, Turkey, India, Brazil and South Africa. In particular, one foreign market where Coca-Cola has had difficulty in the past, the Philippines, recorded double-digit unit case volume growth in the quarter. Coca-Cola acquired the Philippines bottler on Feb. 22.
Coca-Cola remains positive about its outlook for the remainder of the year, and it expects growth to continue across most of its markets, Chief Financial Officer Gary Fayard said Tuesday. The company did not release earnings guidance, in keeping with its past practice.
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