Coca-Cola Beats Profit Estimates

Lifted by emerging markets

Coca-Cola on July 21 reported forecast-beating quarterly profit, aided by strong volume growth in emerging markets like China and India.

The soft-drink maker said it had net profit of $2.04 billion in the second quarter, up 43% from a year ago when heavy charges were taken.

In the 2008 second quarter, Coca-Cola had taken several charges for restructuring and asset writedowns. Excluding those special charges, net earnings in the 2009 April-June period were 9% lower on an annual basis, the company said, explaining the decline was mainly due to the negative foreign exchange impact of a weaker dollar.

Quarterly sales fell 9% from a year ago to $8.26 billion, slightly below market expectations of 8.66 billion dollars.

Global sales volume rose 4% from the same period in 2008. Coca-Cola said unit case volume growth increased strongly in key emerging markets, with 33% growth in India and 14% growth in China. "Sound" case volume growth occurred in other key markets, including Japan, Brazil, Mexico, Argentina, Thailand, Korea and Northwest Europe, it said.

Case volume declined 2% in North America and 1% in Europe.

"In the first half of the year, we delivered volume and profit results in line with our long-term growth targets, despite very challenging global economic conditions said Muhtar Kent, chief executive of Coca-Cola. "We outperformed the nonalcoholic ready-to-drink industry in most of our key markets and drove further global volume and value share gains."

Kent confirmed the company was on track to reach a $500 million target in annualized savings by 2011, adding that more than half of the savings were expected to be delivered by the end of this year.

Copyright Agence France-Presse, 2009

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