COCA-COLA, the world’s largest soft-drink maker, reported fourth-quarter profit that topped analysts’ estimates as teas and juices increased sales in Asia.
Profit excluding some items was 79 cents a share, Coca-Cola said. That exceeded the 77 cent average of 14 analysts’ estimates compiled by Bloomberg.
Net income in the quarter fell to $1.65 billion, or 72 cents a share, from $5.77 billion, or $2.46, a year earlier, when the company posted a gain from an acquisition.
Chief executive officer Muhtar Kent is expanding sales of beverages in Asia with global marketing campaigns and products such as its Minute Maid Pulpy juice drink. Fourth-quarter sales volume rose 5 per cent in Japan and 10 per cent in China.
“Coke’s fourth-quarter results benefited from continued strength from its international beverage portfolio,” said Ann Gurkin, an analyst with Davenport. “We also found the continued strong performance by the Coca-Cola and Coke Zero franchises as a standout for the North American segment.”
Coca-Cola rose 1.3 per cent to $68.94 in mid morning trade in New York. The shares climbed 6.4 per cent last year, while PepsiCo gained 1.6 per cent.
The firm said it plans to reduce costs by $550 million to $650 million by 2015 and use the savings to invest in its brands.
Coca-Cola said it exceeded the $500 million it sought to cut during the four years that ended in the last quarter.
Coca-Cola, which is facing higher costs for commodities such as plastic and corn-based sweeteners, raised pricing to retailers in North America by 1 per cent for the year.
Commodity costs this year may increase as much as $450 million from 2011, driven by juice ingredients and sweeteners, said chief financial officer Gary Fayard.
Foreign-currency fluctuations may reduce operating income in 2012 by a mid-single digit percentage, Mr Fayard said.
Fourth-quarter sales volume in North America gained 1 per cent. Volume sales of Coca-Cola’s flagship soft drink in the region grew 1 per cent in the quarter, while Coke Zero increased by a high single-digit percentage, the company said. Total sales in the quarter rose 5.2 per cent to $11 billion. – (Bloomberg)
