Coca-Cola Co said on Wednesday first-quarter net earnings rose 35 percent, boosted by solid sales in Europe and China, a weak US dollar and an increase in shipments of concentrate, the main ingredient used to make soft drinks.
While the world's largest soft drink maker was widely expected to post improved results, its profit surpassed most Wall Street earnings estimate. Still, its stock fell 1 percent in opening trade.
"Given that Coca-Cola's stock has been strong recently, heading into what everyone was expecting to be a strong quarter, we think that some investors could try and lock in profits in the stock now that the quarter is behind us ..." Smith Barney analyst Bonnie Herzog said in a research note.
Net income rose to $1.13 billion, or 46 cents a share, from $835 million, or 34 cents a share, including one-time charges in the year-earlier period. Revenue rose to $5.08 billion from $4.50 billion.
Analysts, on average, expected a profit of 44 cents per share on sales of $4.93 billion, according to Reuters Research, a unit of Reuters Group Plc.
Coca-Cola executives said its emphasis on product innovation and a new strategy focusing on profits rather than volume growth was beginning to pay dividends in its 200-plus world-wide markets.
"Our quarter was driven by strong growth across each and every one of our business units," Coca-Cola President and Chief Operating Officer Steven Heyer told analysts in a conference call before its annual shareholder meeting in Wilmington, Delaware.
"We are building an excellence culture," said Heyer, who has been named by Coca-Cola as its only internal candidate to replace Chairman and Chief Executive Doug Daft, who is retiring at the end of 2004.
Coca-Cola, also considering outside candidates for Daft's job, said Wednesday it was actively searching for a new chief.
Sales, as measured by unit case volume, rose 9 percent on a reported basis in the quarter, reflecting the benefit from several extra days of shipping compared with the same period in 2003.
When calculated on an average daily sales basis, volume rose, but by a slimmer 2 percent.
Its results were boosted by a 4 percent volume rise in Europe and a 14 percent increase in China.
Volume in North America, its largest and most important market, grew 2 percent due largely to strong sales of the company's Powerade sports drink and Dasani bottled water brand.
The company's trademark Coca-Cola brand, however, had low-single-digit growth.
Reigniting sales of core brands, such as its flagship Coke Classic, has been a top priority in North America since the company started a sweeping global restructuring four years ago.
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