International sales growth boosts third-quarter results at Coca-Cola

by Eric Schroeder
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ATLANTA — Strong sales across international markets helped boost net income at The Coca-Cola Co. 37% in the third quarter ended Sept. 30.

The world’s largest beverage company said it earned $1,283,000,000, equal to 54c per share, for the three months ended Sept. 30, up from $935,000,000, or 39c a share, for the same period a year ago. Third-quarter results included a net charge of 3c per share due primarily to a 4c non-cash charge related to asset write-downs in the Philippines, partially offset by a 1c per share benefit related to the favorable resolution of tax matters.

Net sales in the third quarter rose to $6,037,000,000, up 8% from $5,596,000,000 in the third quarter of fiscal 2004.

"This quarter demonstrates early progress in our efforts to achieve sustainable growth for the future," said E. Neville Isdell, chief executive officer. "We continue to see good results in many markets, including Latin America, Africa, Russia, Turkey, central Europe, Japan and China, and stabilization in an increasingly focused North America."

However, Mr. Isdell said Coke still has a lot of work to do in other markets such as the Philippines, India and Germany, as well as to address certain trends in northwest Europe. The company also said it is monitoring energy prices to determine the potential effect on future results.

Overall, unit case volume increased 5% in the third quarter. The company said growth was led by a 6% increase in international operations, reflecting double-digit growth in key emerging markets, including China, Russia, South Africa, Turkey and the Middle East. Unit case volume for water grew 21% in the quarter, driven by 37% growth in the global Dasani trademark.

In North America, operating income rose 10% to $414,000,000 on sales growth of 8%. Unit case volume in the region increased 3% behind solid growth in both Retail and Foodservice and Hospitality.

Overall, carbonated soft drink unit case volume in North America fell 1% in the quarter, reflecting soft category trends on regular carbonated soft drinks.

In non-carbonated beverages, both Powerade and Dasani grew unit case volume in excess of 30%, supported by warm weather. Warehouse delivered juices increased unit case volume by 11% in the quarter and also increased share in the category, driven by the performance of Minute Maid premium chilled orange juice.

Coke also said packaging and product innovations in North America advanced in line or ahead of expectations with Coca-Cola Zero, Diet Coke Sweetened with Splenda, Dasani flavors, Full Throttle and the Powerade "clutch" bottle.

For the first nine months of the year, Coca-Cola said it earned $4,008,000,000, or $1.67 a share, compared with a profit of $3,646,000,000, or $1.50 a share, for the same period a year ago. Nine-month revenue was $17,553,000,000, up 6% from $16,538,000,000 a year ago.

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