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Bloomberg
Coca-Cola Co., the world’s largest soft-drink company, posted third-quarter earnings that beat analysts’ estimates, helped by new beverages like sports drinks and sales of smaller, more-profitable package sizes.
Profit was 49 cents a share, excluding some items, the Atlanta-based company said in a statement on Wednesday. Analysts estimated 48 cents, on average. And while sales fell 6.9 percent to $10.6 billion, that beat analysts’ $10.5 billion average projection.
With consumers in developed markets abandoning soda for healthier beverages, Chief Executive Officer Muhtar Kent has changed Coca-Cola’s focus from boosting sales volume to increasing profit. His $3 billion cost-cutting initiative — as well as a push to get consumers to buy smaller bottles and cans that sell for a higher price per ounce — have supported earnings. And Coca-Cola has even managed to boost sales in some regions, with revenue in North America gaining 3.3 percent.
“We’re getting good revenue growth by focusing on smaller packs in sparkling, by innovation, new marketing, but we’re also being innovative,†Chief Operating Officer James Quincey said in an interview on Bloomberg Television.
The company reaffirmed its earnings and sales forecasts for the year. Adjusted profit per share will decline 4 percent to 7 percent from last year. Organic revenue — which excludes acquisitions, divestitures and currency exchange-rate fluctuations — will increase 3 percent.
The shares rose 1.4 percent to $43.15 at 7:31 a.m. in early trading in New York.
The stock was down 1 percent this year through Tuesday. Coca-Cola, PepsiCo Inc. and Dr Pepper Snapple Group have faced declining sales volumes as consumers shun sugary drinks.
Some municipal governments are turning against soda, too. Last month, Philadelphia became the first major U.S. city to pass a tax on diet and sugar-added beverages. Soda taxes are on the ballot this November in San Francisco and Oakland, California, and Boulder, Colorado.
To help deal with consumer and government backlash towards its core soda business, Coca-Cola has diversified its portfolio of beverages to add bottled waters, juices, coffees and teas.