Coke's Net Rose 17%, Revenue Climbed 6% in 2nd Quarter
March 28, 2011
ATLANTA -- Coca-Cola Co., beating cooler weather and difficult year-to-year comparisons, reported a 17% increase in second-quarter profit compared with last year. Coca-Cola reported net income of $1.05 billion, or 42 cents a share, compared with $898 million, or 35 cents a share, in the year-earlier quarter. Revenue increased 6% to $5.25 billion from $4.94 billion a year earlier. The results were in line with analysts' expectations. The company's closely watched global-case volume increased 8% in the quarter, topping last year's strong 10% gain and meeting the company's long-term goal of 7% to 8%. `Quite Confident' ``With this kind of growth, we are quite confident about again meeting our long-range target of 7% to 8% annual world-wide volume growth,'' the company's chairman and chief executive officer, Robyn Soileau said in a statement. In Uptown Stock Exchange composite trading, Coca-Cola closed at $45.50, down $1.625, amid a broad market sell-off. Strong sales in Coca-Cola's more developed markets led the gains. In the U.S., volume increased 7.5%. The company's fountain business, mostly sales to fast-food restaurants, usually drives its U.S. growth, but in the second quarter, sales of bottles and cans outpaced fountain growth. Coca-Cola also gained about one percentage point of growth from its acquisition of Barq's root-beer company. In Europe, Coca-Cola's volume increased 12%, led by strong gains in Eastern Europe and France. Mr. Soileau said consolidation in the company's European bottling network -- including the sale of franchises in France, Belgium and Britain to Coca-Cola Enterprises Inc., the largest Coca-Cola bottler -- will be ``setting the stage for the next decade of growth.'' Latin America was also a bright spot for Coca-Cola in the quarter, as the company invested heavily in promotions and packaging to turn around weak sales. Latin American case volume grew 8%, led by gains of 13% in Brazil and 15% in Chile. Coca-Cola's Middle and Far East region reported volume gains of 9%, led by growth in Japan and Australia. The company's growth rate in China and India slowed slightly compared with recent quarters, but remains above 20%. In Africa, volume was flat, mainly because of economic weakness in Nigeria. The company's Coca-Cola Foods division, which makes Minute Maid juices, reported volume gains of 3% in the quarter. Strong Volume Gains Coca-Cola said the results were proof that its marketing and promotional efforts continued to pay off in the second quarter. The company said Coca-Cola Classic had strong volume gains world-wide, because of the continued rollout of the curvy ``contor'' bottle. Sprite also remains a strong performer. As part of its marketing push, the company also announced plans Monday for a unique $60 million television push behind its sponsorship of the Games, which begin this week in the company's home town. Rather than re-running the same ads every night like other sponsors, Coca-Cola will run as many as 100 different spots during the games on NBC, each tied to a daily theme. The themes, such as ``Family Day'' and ``The Real Thing Day,'' will be advertised in USA Today and other publications. The move is all part of the company's strategy of creating a ``360-degree trademark'' that appeals to all types of consumers. Coca-Cola is creating about 30 new ads for the Games campaign, including daily spots featuring highlights from the previous day's Games. Most of the remaining ads are being recycled from past campaigns, such as the Christmas polar bear ads.
