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Coke’s earnings fizz on solid revenue gain

The Coca-Cola Co., the world’s largest beverage maker, reported a 9 percent jump in second-quarter profit on solid gains in revenue, handily beating Wall Street expectations.
/ Source: The Associated Press

The Coca-Cola Co., the world’s largest beverage maker, reported a 9 percent jump in second-quarter profit on solid gains in revenue, handily beating Wall Street expectations.

The Atlanta-based company said Thursday it earned $1.72 billion, or 72 cents a share, for the three months ending July 1, compared to a profit of $1.58 billion, or 65 cents a share, in the same period a year ago.

Excluding one-time items — a favorable lawsuit settlement and tax-related benefits — Coca-Cola earned $1.64 billion, or 68 cents a share. On that basis, analysts surveyed by Thomson Financial were expecting earnings of 64 cents a share.

Revenue in the quarter was $6.31 billion, a 7 percent increase from the $5.91 billion recorded in the same three-month period a year ago.

Overall, unit case volume increased 5 percent in the second quarter, led by a 7 percent increase in international operations.

In Coke’s key North America unit, the company said unit case volume increased only 1 percent in the quarter.

Chief executive Neville Isdell said he was pleased by the results, though he stressed that the company still needs to do more, especially at home.

“We still have considerable work ahead of us in the U.S. and in markets like Germany, the Philippines and, in particular, India, as well as to improve our performance in the areas of innovation and marketing,” Isdell said.

Last month, Coke reached an agreement with European regulators to restrict the company’s business agreements with merchants. The agreement required the company to open up more shelf and cooler space to rivals in Europe.

Under the deal, Coca-Cola can’t make exclusive arrangements with stores and cafes in Europe that stop them from serving rival brands, or offer them rebates for buying more of its brands.

The agreement applies to 27 countries in Europe. The agreement followed years of complaints by Purchase, N.Y.-based PepsiCo Inc., which accused Coke of squelching competition in Europe.

For the first six months of the year, Coca-Cola said it earned $2.73 billion, or $1.13 a share, compared to a profit of $2.71 billion, or $1.11 a share, in the prior-year period. Six-month revenue was $11.52 billion, a 5 percent increase from the $10.94 billion recorded in the same period a year ago.