Coke Results Top Expectations on Volume, Pricing Growth--Update
February 09 2016 - 8:02AM
Dow Jones News
By Chelsey Dulaney
Coca-Cola Co. on Tuesday reported better-than-expected profit
and revenue for its fourth quarter, as higher volume and pricing
helped offset the impact of weakness abroad.
The beverage giant also said it is accelerating its
bottler-refranchising efforts and expects to finish refranchising
its North American assets by the end of 2017, three years ahead of
schedule. Coke has spent billions buying back bottling assets in
North America, but it has reversed course recently as part of its
cost-cutting effort.
Coke has been struggling with weakness overseas, with key
countries such as Russia and Brazil in recession, consumer demand
weak in Europe and Japan, and China's economy slowing. Weakening
foreign currencies also are hitting Coke, which generates about
half its sales abroad but translates results into dollars.
But the company has been able to offset that in part by raising
prices and steering consumers to smaller packages that cost more
per ounce in its U.S. market.
For the fourth quarter, Coke reported that its beverage volumes
grew 3% both world-wide and in its key North American market.
Chief Executive Muhtar Kent said the North American division
last year delivered its strongest annual performance in three
years.
Noncarbonated drinks like tea, bottled water and ultra-filtered
nutrient-rich milk, continued to log strong growth, improving 6%
world-wide in the fourth quarter. Soda volumes rose 2% globally, as
7% growth in Coca-Cola Zero offset a 5% decline in Diet coke.
Overall, Coke posted a profit of $1.24 billion, or 28 cents a
share, up from $770 million, or 17 cents a share, a year
earlier.
Excluding certain items, per-share earnings were 38 cents,
edging in above the 37 cents analysts polled by Thomson Reuters had
forecast.
The company said foreign exchange shaved 10 percentage points
off its per-share earnings in the quarter.
Revenue fell 8% to $10 billion. Analysts polled by Thomson
Reuters had forecast revenue of $9.91 billion. The top line was
hurt by six fewer days compared with the prior-year period.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
February 09, 2016 07:47 ET (12:47 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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