Shows & Panels
- The 2014 Big Picture on Cyber Security
- AFCEA Answers
- Ask the CIO
- Building the Hybrid Cloud
- Connected Government: How to Build and Procure Network Services for the Future
- Continuing Diagnostics and Mitigation: Discussion of Progress and Next Steps
- Federal Executive Forum
- Federal Tech Talk
- The Future of Government Data Centers
- The Future of IT: How CIOs Can Enable the Service-Oriented Enterprise
- Government Perspectives on Mobility and the Cloud
- The Intersection: Where Technology Meets Transformation
- Maximizing ROI Through Data Center Consolidation
- Mitigating Insider Threats in Virtual & Cloud Environments
- Modern Mission Critical Series
- Moving to the Cloud. What's the best approach for me
- Navigating Tough Choices in Government Cloud Computing
- The New Generation of Database
- Reimagining the Next Generation of Government
- Satellite Communications: Acquiring SATCOM in Tight Times
- Targeting Advanced Threats: Proven Methods from Detection through Remediation
- Transformative Technology: Desktop Virtualization in Government
- The Truth About IT Opex and Software Defined Networking
- Value of Health IT
- Air Traffic Management Transformation Report
- Cloud First Report
- General Dynamics IT Enterprise Center
- Gov Cloud Minute
- Government in Technology Series
- Homeland Security Cybersecurity Market Report
- National Cybersecurity Awareness Month
- Technology Insights
- The Cyber Security Report
- The Next Generation Cyber Security Experts
Shows & Panels
Coca-Cola's profit climbs but obstacles loom
Tuesday - 2/12/2013, 3:32pm EST
AP Food Industry Writer
NEW YORK (AP) -- Coca-Cola is facing a tough time: people are drinking less soda in the U.S. and Europe and uncertain economic conditions around the world are weighing on the world's biggest beverage maker.
The Atlanta-based company said Tuesday that its profit rose in the fourth quarter, as it benefited from growth in emerging markets and a shift in the calendar that resulted in two extra selling days for the period. But sales volume fell in China and Europe, reflecting a pullback in consumer spending.
In North America, its biggest market by revenue, volume rose just 1 percent, boosted by its Powerade sports drinks and bottled teas. The company sold 2 percent less soda.
In a conference call with analysts, CEO Muhtar Kent said he expects 2013 will "once again be a year of challenges" but that the company nevertheless expects to hit its long-term target of 6 percent to 8 percent growth in operating income.
In the U.S., he said Coca-Cola is starting to see signs of improvement in consumer sentiment but that it was still waiting to see the impact of higher payroll taxes and gasoline prices. In China and Europe, the company said it expects volumes to start rebounding in coming quarters.
"Our view is that this is not the start of a trend," said Gary Fayard, the company's chief financial officer, noting that quarterly declines occasionally happen.
Coca-Cola, which also makes Fanta, Minute Maid and Dasani water, is increasingly looking for growth in countries where its drinks aren't yet as ubiquitous as they are in developed nations. In North America, the company is also relying on a shifting mix of beverages to boost sales amid intensifying criticism of sugary sodas.
The company is also facing tougher competition from PepsiCo Inc., which has significantly stepped up its marketing with major deals including a multiyear contract to sponsor the Super Bowl halftime show. When asked whether that push was having any effect, Kent declined to comment but noted that Coca-Cola's share of the soda market grew despite a broader industry decline.
"To be frank, we see competition as healthy. It keeps us on our toes," Kent said.
For the quarter, Coca-Cola said global sales volume rose 3 percent, helped by gains in countries such as Turkey and Russia.
In Europe, the company blamed an uncertain economy, bad weather and price competition for a 5 percent decline in volume.
In China, where U.S. companies of all stripes are looking for growth, volume declined 4 percent after growing 10 percent in the year-ago quarter. The company said the business in the region was impacted by a slowing economy, bad weather and a later Chinese New Year.
Even though Coca-Cola has quarters where volumes decline in regions such as Europe and China, Kent noted that the company's results have been insulated by its geographic diversity. The company sells drinks in every country but Cuba and North Korea.
For the October-to-December period, The Coca-Cola Co. earned $1.87 billion, or 41 cents per share. That's compared with $1.66 billion, or 36 cents per share, in the year-ago period. Not including one-time items, the company said it earned 45 cents per share.
Revenue rose 4 percent to $11.46 billion.
Analysts on average expected an adjusted profit of 44 cents per share on revenue of $11.53 billion.
For the full year, net income was $9.02 billion, or $1.97 per share, up from $8.58 billion, or $1.85 per share, in the year-ago period.
Looking forward, Coca-Cola expects prices for ingredients such as sweeteners, juice, metals and plastic to rise more moderately in the past year. The company expects foreign currency translation to hurt operating income by 4 percent in 2013, compared with a 5 percent impact in 2012.
Its shares were down 3 percent at $37.55.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.