| Coca cola shares rise after profit report |
|
09/02/2010 18:03 (731 Day 22:35 minutes ago) | |||||
|
The FINANCIAL -- Coca-cola shares rose in pre-market trading after the company's fourth-quarter profit climbed in line with estimates as international unit case volumes soared.
The company said Tuesday that its unit case volume rose sharply in emerging markets like China and India, and also saw solid growth in Latin America, AP reports. Shares rose 71 cents to $53.36 in premarket trading. The only region to report a decline was North America, where case volume fell 1 percent, a sign that those consumers are still wary about their spending. North America makes up about one-fourth of the company's sales.
According to the same source, many U.S. have clamped down on their purchases amid the recession, and beverages are no exception. Consumers in North America are either cutting their soft drink purchases or switching to healthier juices and teas, which has led Coca-cola to concentrate more on expanding in emerging markets.
The company, which has been battling sluggish U.S. soda sales volume for some time, draws large part of its revenue from countries like India and China that remained resilient amid the global recession, The Wall Street Journal reports. Coca-cola reported a profit of $1.5 billion, or 66 cents a share, up from $995 million, or 43 cents a share, a year earlier. The prior year had 21 cents in charges. Revenue increased 5% to $7.5 billion, though the period had six fewer selling days.
Analysts polled by Thomson Reuters most recently forecast earnings of 66 cents and revenue of $7.21 billion, according to the same source. Gross margin rose to 64.7% from 63.9%. North America sales fell 4% as volume declined 1%. But volume rose 6% internationally, led by an 11% jump in the Pacific region.
Coca-Cola expects currencies to have a slightly positive impact on full-year 2010 operating income with the benefit more heavily weighted to the first half of 2010, the Street reports. It also anticipates that its underlying effective tax rate on operations for the full year 2010 will be in the range of 23% to 23.5%.
Coke's rivalry with PepsiCo Inc (PEP.N) is poised for a new turn this year, as the No. 2 soft-drink maker is about to complete its planned acquisition of its largest bottlers, Pepsi Bottling Group Inc (PBG.N) and PepsiAmericas Inc (PAS.N), to trim costs and speed decision-making, according to Reuters. Coke Chief Executive Muhtar Kent has repeatedly expressed his commitment to its current decentralized, franchise bottling model.
|
|
|
