Coke profit beats forecast

Coca-Cola Co on Tuesday reported a quarterly profit that beat Wall Street's consensus forecast, sending shares of the world's largest soft drink maker up 3 percent. Coca-Cola executives also said its brands gained on rivals in the fast-growing bottled water and sports drink markets in the first quarter and held their ground in the all-important carbonated soft drink category. Reigniting sales of the Coke Classic drink and other core products has been a top priority since the Atlanta-based company embarked on a sweeping restructuring of its global operations more than five years ago.
"We're much better positioned for the remainder of the year in terms of the brands we have," Coca-Cola Chairman and Chief Executive Neville Isdell said in a conference call with analysts shortly after release of the results.
But Isdell, who has been candid about the need to improve marketing and innovation since he took over Coke's reins last summer, cautioned that the firm still faced significant challenges in Germany and other key markets.
Coca-Cola earned $1 billion, or 42 cents a share, for the three months ended March 31, compared with $1.13 billion, or 46 cents a share, a year earlier. Revenue increased to $5.27 billion from $5.08 billion.
When a tax liability related to the company's decision to repatriate about $2.5 billion earned overseas and other special items were excluded, its profit rose to 47 cents a share.
Analysts on average had forecast a profit of 43 cents per share on sales of $5.15 billion, according to Reuters Estimates. Coca-Cola added that it would consider bringing up to $3.6 billion more of its overseas profit back to the United States to take advantage of the American Jobs Creation Act.
A weak US dollar and other currency fluctuations added about 5 percent to Coke's operating income. A falling dollar improves financial results when overseas earnings are converted into US currency.
The well-received quarterly results came amid a continued restructuring of Coca-Cola's operations that is designed to boost the company's performance in its more than 200 markets around the world.
Coca-Cola is hoping to improve its fortunes in 2005 with the roll-out of a flurry of drinks, including an energy drink called Full Throttle and a version of Diet Coke sweetened with the sugar substitute Splenda.
One of the keys to the company's future is capturing more consumers who have moved away from sugary soft drinks to diet versions or to healthier low-or no-calorie beverages such as water and orange juices with reduced sugar.
But volumes in North America, Coke's largest market and the one often used as a gauge of its fortunes, were flat. European volumes fell 1 percent. Coca-Cola is scheduled to hold its annual shareholder meeting on Tuesday in Wilmington, Delaware.