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Coca-Cola Co. 2Q profit drops 23 percent
2008-07-17
ATLANTA - Coca-Cola Co. said Thursday its second-quarter profit fell 23 percent as it took a one-time charge related to its bottler. The world's biggest beverage company earned $1.42 billion, or 61 cents per share, compared with $1.85 billion, or 80 cents per share, in the year-ago quarter. Revenue rose 17 percent to $9.05 billion from $7.73 billion a year earlier. Excluding one-time items, per-share earnings were $1.01. The quarter's earnings included a 40-cent-per-share non-cash charge related to bottler Coca-Cola Enterprises Inc. Analysts polled by Thomson Financial expected a profit of 96 cents per share on revenue of $8.93 billion, on average. The company's international business had 5 percent volume growth in the quarter. Volume growth for the overall business was 3 percent, which Morgan Stanley analyst Bill Pecoriello said was lower than the 4 percent to 5 percent Wall Street had expected. "Our results were once again led by our international operations, which delivered 5 percent unit case volume growth, and we maintained volume in North America despite significant challenges," Chief Executive Muhtar Kent said in a statement. Along with competitors, Coca-Cola has been suffering from lower demand for soda by U.S. consumers. It reported flat sales even with help from acquisitions. The company bought Glaceau's Vitaminwater for $4.1 billion last June. Bottler Coca-Cola Enterprises also reported earnings Thursday, posting a second-quarter loss of $3.17 billion and saying it will raise prices in the U.S. after Labor Day. Analysts have said that if the bottler raised prices, then Coca-Cola may also want to do so. Morgan Stanley's Pecoriello wrote in a note to investors that Coca-Cola Co. is likely to evaluate how much it should raise concentrate prices "to offset any incremental volume weakness from the price increases" from its bottler. Shares fell 34 cents to $52 in premarket electronic trading Thursday, having closed Wednesday's regular session at $52.34.
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