Coca-Cola Reports Solid Profit,

Topping Wall St. Forecasts

The Coca-Cola Company managed to beat Wall Streets
expectations, reporting strong profits for its fourth quarter thanks to
higher prices for its products.
The company also said on Tuesday that it would accelerate sales of
its bottling operations, a tactic favored by investment analysts
because it bolsters earnings.
Volume sales for the last quarter of 2015 continued to shift toward
noncarbonated drinks like bottled water, tea and juice, which grew
at three times the rate of sales for carbonated drinks.
Revenue in the quarter that ended Dec. 31 fell to $10 billion, down 8
percent, compared with $10.9 billion in the same period a year
earlier. The figures, though, exceeded analysts expectations.

Profit rose to $1.24 billion, or 28 cents a share, up from $770

million, or 17 cents a share, in the year-ago period. Excluding onetime items, Cokes earnings were 38 cents a share, a penny more
than analysts had predicted.
Our fourth-quarter performance was a testament to the action we
took as the company continued to deliver solid pricing and unit case
volume growth, Muhtar Kent, chief executive of Coca-Cola, said in a
news release.
Like many other companies that report their earnings in dollars,
Coca-Cola said foreign currency translation had sliced 10 percentage
points off its per-share earnings in the fourth quarter.
Weakness internationally, where economies in several of Cokes
major markets are slowing, crimped the companys performance
and offset volume growth of 3 percent in North America.
In 2015, Coca-Colas sales fell to $44.3 billion, down 4 percent,
compared with $46 billion a year earlier. Profit for the year rose to
$7.4 billion, a 3 percent gain over $7.1 billion in 2014.

Coca-Cola Profit Up 19%, Despite Lower Sales

How long will consumers continue to pay more for less soda?
Consumers paying more for an ounce of soda served in a smaller
package than they would pay for an ounce packaged in a 12-ounce
can or a two-liter bottle helped propel profits at the Coca-Cola
Company, despite lower sales in the quarter that ended July 3.
Coca-Colas earnings jumped 19 percent in the quarter to $3.1
billion, or 71 cents a share, from $2.6 billion, or 58 cents a share, in
the same period last year. Sales declined 3 percent, to $12.2 billion,
from $12.6 billion a year ago.
The company would have done even better on paper if not for the
strong dollar, which dented its reported performance, though not
more than it had expected earlier in the year.
Our second-quarter results were in line with our expectations and
mark continued progress toward restoring momentum in our global
business, said Muhtar Kent, chief executive of Coca-Cola.
The company attributed its higher profits partly to strong growth in
sales of small and specialty packages like eight-ounce cans and
glass contour bottles of some sodas. Such sales account for
somewhat less than 15 percent of all the soda it sells, according to
Sandy Douglas, president of its North American business.
The whole range of new and proprietary packaging is in the low
teens in terms of sales but growing in the high teens, Mr. Douglas
said in a conference call with reporters.
Asked how long the company could continue to rely on such higher
pricing, Mr. Kent said it was not a matter of taking a package and

increasing the price. Rather, it was about a higher price per ounce,
he said. The smaller the pack, the higher the price is per ounce.
He said consumers had voted for the strategy with their dollars, the
proof of which was Cokes higher sales of products sold in such
packages.
The company, which is based in Atlanta, also said it benefited from
the success of marketing and advertising campaigns, in particular
the Share a Coke program, which allows consumers to customize the
labels on bottles of Coke.
Sales of teas and other noncarbonated beverages also rose smartly in
the quarter, and sales of bottled waters grew 8 percent. But such
drinks do not have the profit margins of what Coca-Cola calls
sparkling drinks, or sodas.
Those beverages did not perform as well, with sales of Diet Coke
falling 7 percent in the quarter. Pepsi, from Coca-Colas archrival
PepsiCo, recently outpaced Diet Coke to regain its post as the
second-best-selling soda in America, behind Coke.
And PepsiCo announced in April that, in response to consumer
concerns, it was replacing aspartame with another sweetener in Diet
Pepsi. Coca-Cola has long said that science confirms that aspartame
is safe for human consumption, and Mr. Douglas repeated that on
the conference call on Wednesday. Coca-Cola shares fell 0.7 percent
on Wednesday to close at $40.90.
I think the confusion out there will abate as real science is
reinforced, he said. That said, I think the trend toward natural is
more of an enduring trend.

Coca-Cola Reports 4.6% Drop in Revenue

The Coca-Cola Company struggled for another quarter, wrestling
with the strong dollar and a continued lack of enthusiasm for soda
among consumers.
Despite higher volume sales, the company reported on
Wednesday that revenue fell 4.6 percent, to $11.4 billion, in the third
quarter, which ended Oct. 2. Analysts had expected $11.58 billion.
Earnings on a reported basis dropped to $1.4 billion, or 33 cents a
share, a 31 percent decline compared with the same period last year,
when earnings were $2.1 billion, or 48 cents a share.
After adjustments to account for charges related to divestment and
consolidation of some of Cokes bottling and distribution operations
and for a restructuring program, Coca-Cola earned 51 cents a share,
or about 1 cent more than analysts had estimated.
Our third-quarter results were in line with our expectations and
reflect the continued execution of our strategic initiatives to restore
momentum, which are beginning to take hold across our global
business, said Muhtar Kent, chief executive of Coca-Cola.

As it has for other American companies that generate a large portion

of sales and earnings abroad, the strong dollar dented Cokes
performance. Organic revenue, which eliminates the impact of
currency swings, grew 3 percent, for example.
The company said it continued to benefit from raising prices slightly
and reducing package sizes, essentially charging customers more for
less.
Volume sales, which measure the amount of its product being sold,
grew, although such sales of Cokes still, or uncarbonated
beverages, grew about three times more than sales of sparkling
beverages.
Sales of Coca-Cola, the companys signature brand, grew 1 percent.
Sales of Coke Zero, the companys diet soda aimed at young men,
grew 8 percent.
But sales of Diet Coke, another diet version of its iconic soft drink
that has virtually the same ingredients as Coke Zero but a different
flavor profile, fell 8 percent.