US: Coke Consolidated down against tough 2005
Coca-Cola Bottling Co. has posted a huge drop in net income for its third quarter as a fall in demand for carbonated beverages took its toll.
The company said yesterday (13 November) that, for the three months to 1 October, net income fell from US$8.8m in the same quarter a year earlier, to $4.9m. Sales in the period rose slightly, to $370.6m from $362m.
For the nine months of 2006 so far, sales rose to $1.09bn from $1.03bn, while net income was down to $14.6m from $21m.
Coke Consolidated highlighted a number of favourable factors in the corresponding period for 2005 which helped produce impressive figures that this year was struggling to match.
The company said that it has seen a decline in demand for sugar carbonated beverages over the past few years, and warned that it expects this trend to continue.
In the release to the Securities and Exchange Commission, Coke Consolidated noted that it has reached an agreement with a state taxing authority to settle certain prior tax positions for which it had previously provided reserves due to uncertainty of resolution.
Consequently, in the final quarter of this year, Coke Consolidated said it will reduce the valuation allowance on related deferred tax assets by $1.8m and reduce the liability for uncertain tax positions by $2.6m. This adjustment will be reflected as a reduction of income tax expense in the quarter.
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