Coca-Cola Co posted higher-than-expected quarterly results after the world's largest soft drink maker sold more beverages, even in developed markets with economic challenges, fuelling hopes that conditions are improving.
The maker of Sprite, Minute Maid orange juice and vitaminwater, which does business in more than 200 countries, saw volume rise 3 percent in Germany and Japan, 6 percent in Spain and 1 percent in the United States, in a sign that consumers may be opening their wallets again after economic uncertainty curbed demand. "Despite its struggle with a sustained period of relative high unemployment, we are pleased to see some early signs of a slowly improving macroeconomic environment," Coke Chief Executive Muhtar Kent said about the United States.
Coke shares were up $1.98, or 2.7 percent, at $74.42 in early afternoon trade on the New York Stock Exchange. Coca-Cola's first-quarter net profit was $2.05 billion, or 89 cents per share, up from $1.90 billion, or 82 cents per share, a year earlier. Revenue rose 6 percent to $11.14 billion, helped by a 5 percent increase in overall volume and a 3 percent increase in prices and mix of products sold. Analysts on average expected earnings of 87 cents per share on revenue of $10.82 billion, according to Thomson Reuters I/B/E/S.
In the key North American market, operating income declined 9 percent, excluding the impact of currency fluctuations, due to higher costs for commodities such as packaging and sweetener and one less selling day. Excluding those factors, profit would have been up, Coke said. Coca-Cola also said it was on track with a productivity program aiming to save $550 million to $650 million a year by the end of 2015.
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