Coke’s quarterly profit beats forecasts
NEW YORK: Coca-Cola, the worlds largest maker of soft drinks, reported higher-than-expected quarterly profit on Wednesday, helped by higher sales, acquisitions and foreign exchange rates.
Coca-Cola said fourth-quarter net income was $1.21 billion, or 52 cents per share, compared with $678 million, or 29 cents per share, a year ago.
Excluding charges, Coke earned 58 cents per share, topping analysts average estimate of 55 cents, according to Reuters Estimates.
Net operating revenue rose to $7.33 billion from $5.93 billion a year ago, helped by a 6 percent increase in sales of drink concentrate, the companys main business.
Currency exchange rates lifted revenue 8 percentage points, since the weak dollar versus foreign currencies increases the value of international sales when they are converted to U.S. dollars for inclusion on the companys income statement.
Unit case volume rose 5 percent in the quarter, supported by acquisitions.
Coke, which owns about 35 percent of its bottler Coca-Cola Enterprises, saw its year-ago profit affected by an asset write-down the bottler took related to its North American franchise license.
Coca-Cola, like rival PepsiCo Inc, has seen its North American profits hurt by rising commodity costs and a consumer shift away from traditional carbonated soft drinks toward drinks like bottled water and tea, which are seen as healthier.
But Coke has offset weak sales of drinks like Coca-Cola and Sprite with strong sales in emerging markets, acquisitions of noncarbonated drinks including Vitaminwater, and the introduction of Coke Zero, a no-calorie version that tastes more like “the Real Thing” than Diet Coke.
The chief financial officer Gary Fayard said currency fluctuations should have a “minimal impact” on operating income in 2008, while commodity costs should be flat for the company, but up slightly for the whole Coca-Cola group, which includes bottlers.
Fayard also said Coke plans $1.6 billion to $1.7 billion of capital expenditures in 2008 and plans to spend $1.5 billion to $2 billion buying back shares.
