Coca-Cola Q1 Profit Meets View, Revenues Top

(RTTNews) - Beverages giant Coca-Cola Co. (KO) reported Tuesday a profit for the first quarter that decreased eight percent from last year, despite higher worldwide volumes, reflecting a revenue drop. However, adjusted earnings per share matched analysts' expectations, and quarterly revenues topped their estimates.

"Our growth momentum is steadily improving in line with our expectations, as we delivered sequentially stronger volume growth of 2% in the quarter while gaining global volume and value share in nonalcoholic ready-to-drink beverages," Chairman and CEO Muhtar Kent said.

The Atlanta, Georgia-based company reported net income of $1.62 billion or $0.36 per share for the first quarter, lower than $1.75 billion or $0.39 per share in the prior-year quarter.

Excluding charges and gains, adjusted net income for the quarter was $1.95 billion or $0.44 per share, compared to $2.07 billion or $0.46 per share in the year-ago quarter.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.44 per share for the quarter. Analysts' estimates typically exclude special items.

Net operating revenues for the quarter declined 4 percent to $10.58 billion from $11.04 billion in the same quarter last year, but topped sixteen Wall Street analysts' consensus estimate of $10.55 billion by a whisker. Meanwhile, comparable currency neutral net revenues grew 2 percent.

The company noted that worldwide volumes grew 2 percent, reflecting volume growth in Latin America, Asia Pacific as well as Eurasia and Africa, partially offset by a decline in Europe and flat volumes in North America. Coca-Cola International volume was up 2 percent.

Volume in developed markets was down 1 percent, impacted by the shift in the Easter holiday. Meanwhile, volume grew 3 percent in developing and emerging markets, with China and Brazil leading the growth. India and Russia both grew volume 6% while gaining NARTD volume and value share.

The company said worldwide sparkling beverages volume was down 1 percent. Worldwide still beverage volume grew 8 percent, with solid growth across most beverage categories, including juices and juice drinks, ready-to-drink teas, sports drinks and packaged water.

The company reported global volume and value share gains in nonalcoholic ready-to-drink beverages as it continues to leverage the strongest portfolio of brands in the industry.

The company noted that it is expanding its previously announced productivity and reinvestment program to generate an incremental $1 billion in productivity by 2016. The company added that it is on track to invest an incremental $400 million in 2014 media initiatives to accelerate top-line growth.

Looking ahead to fiscal 2014, the company anticipates an unfavorable 1 percent structural impact on both full-year net revenues and operating income due to the bottling transactions that was completed in 2013. The full impact is expected to occur in the first half of the year.

"While we are making meaningful progress across our five strategic priorities to restore our momentum, we are firmly committed to further advancing our growth trajectory through 2014 as we are accelerating marketing investments in our brands and focusing relentlessly on marketplace execution in partnership with our bottling partners around the world," Kent added.

KO closed Monday's regular trading session at $38.73, up $0.02 on a volume of 19.36 million shares. In the past 52-week period, the stock has been trading in a range of $36.83 to $43.43.