US: Coca-Cola Co sees Q1 profits drop, volumes rise

By | 16 April 2013

  • Q1 net profits drop by 15% to US$1.75bn
  • Net sales slip by 1% to $11.04bn
  • Operating profits down by 4%, hitting $2.4bn
  • New US bottler model unveiled 
Coca-Cola released its first-quarter numbers today

Coca-Cola released its first-quarter numbers today

The Coca-Cola Co has posted a drop in Q1 sales and profits and announced a proposed shake-up of its US bottling operations.

Net profits fell by 15% to US$1.75bn in the three months to 29 March, the Atlanta-based company said today (16 April). Net sales stayed mainly flat, down by 1% to $11.04bn over the same period while operating profits dropped by 4% to $2.4bn.

The company blamed two fewer selling days for the profits and sales declines, as well as expenses from structural changes.

Coca-Cola's global volumes were up by 4% in the period, and global sparkling beverage volumes increased by 3%. Brand Coca-Cola also posted a 3% year-on-year volumes rise.

Coca-Cola CEO Muhtar Kent said: “I am pleased with our first quarter performance results, having once again delivered solid growth against the backdrop of a still uncertain global economy.”

North America was Coca-Cola's biggest Q1 loser, with operating profits down by 24%, despite a 1% volumes increase. Currency neutral operating profits were down by 3% for the region. Meanwhile, Eurasia & Africa saw operating profits climb by 6%, while net sales improved by 9% and volumes increased by 15%.

Coca-Cola also announced the launch of a new bottler model in the US that will grant expanded territories to five Coca-Cola bottlers. The agreement is between Coca-Cola and Coca-Cola Bottling Co Consolidated, Coca-Cola Bottling Company United, Swire Coca-Cola USA, Coca-Cola Bottling Company High Country and Corinth Coca-Cola Bottling Works.

Under the deal, the bottlers can choose to enact an outright territory sale, a territory swap, or a sub-bottling arrangement, in which the bottler would make payments in exchange for exclusive operating rights. 

If all parties agree to the deal, it could be finalised by next year, Coca-Cola said.

Coca-Cola's share price was up by 3% in pre-market trading.

To read the company's official statement, click here.

Expert analysis

The Coca-Cola Company (KO) - Financial and Strategic SWOT Analysis Review

The Coca-Cola Company (Coca-Cola) is a non-alcoholic beverages company. It undertakes production, distribution and marketing of non-alcoholic beverages. The company offers beverage concentrates, syrups, and finished sparkling and still beverages. It offers non-alcoholic beverages such as juices and juice drinks, soft drinks. energy and sports drinks, ready-to-drink teas and coffees, waters and enhanced waters. It owns and markets world’s leading non-alcoholic sparkling beverage brands, namely, Coca-Cola, Fanta, Diet Coke and Sprite. Coca-Cola also offers fountain syrups, syrups and concentrates, such as flavoring ingredients and sweeteners.

Sectors: Company results, Soft drinks

Companies: Coca-Cola Co, Coca-Cola Bottling

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