The world's largest soft drink maker, Coca-Cola Co, has reported a net loss of US$125m for the first quarter 2002 after the impact of new accounting rules, but earnings excluding items topped expectations, driven by good volume growth worldwide. The company reported income of US$863m a year earlier.

Coke reaffirmed its outlook for the full year of 5 to 6% volume growth, although Coca-Cola conceded that it faced economic challenges in many of its market.

"We are encouraged by this good, solid quarter of performance in the face of a continuing challenging global economic environment," Douglas Daft, Coca-Cola's chairman and chief executive officer, said in a statement. "The execution of our strategic priorities is driving healthy growth from both our carbonated and non-carbonated brands."

Coke has adopted a new accounting rule that eliminates amortization of goodwill as a quarterly expense. That adjustment reduced per-share earnings by 37 cents. The company also recorded a noncash charge of six cents a share, primarily related to investments in Latin America caused by the economic crisis in Argentina and a one-cent gain from the sale of Cervejaria Kaiser, Brazil's second-largest brewer, to Molson Inc.

Excluding items, Coke beat analysts expectations by reporting earnings of 40 cents per share compared with 35 cents a share, a year before. Revenue rose 3% to $4.08 billion from $3.96 billion.

Worldwide unit case volume increased more than 5%, driven by growth of 5% or more in the key markets of the US, Japan, Mexico and Germany. But Latin American was hurt by economic troubles in the region, and Coke said it is working to minimise the impact on its businesses there.
 
Coke said carbonated soft drinks volume grew by 3% in the quarter, while non-carbonated beverages volume rose 22%.