US: Sales slip fails to hinder net profits rise in Coca-Cola Co H1
The Coca-Cola Co has posted a healthy lift in net profits for the first half of this year, despite a dip in sales and operating profits in the period.
The soft drinks giant said today (21 July) that net profits for the six months to 3 July climbed by 16% on the corresponding period a year earlier, totalling US$3.38bn. Sales and operating profits, however, were both down by 6% year-on-year, to $15.44bn and $4.30bn respectively.
Coca-Cola took a notable hit in Europe in the period, with operations in the region delivering an 11% fall in operating profits versus H1 last year, at $1.55bn. Sales in Europe slid by 15% to $2.63bn. In North America, however, operating profits were up by 13% at $883m, while sales inched up by 3% to $4.27bn.
Eurasia & Africa and Latin America both saw operating profits and sales dip in the six-month period by single to low- double digits.
For the three-month period of its second quarter, Coca-Cola saw net profits leap by 43% to $2.04bn. Sales and operating profits mirrored each other again, however, with 9% decreases to $8.27bn and $2.44bn respectively.
For the quarter, the company reported earnings per share of $0.88, a 44% year-on-year leap. "Reported earnings per share for the second quarter of 2009 and 2008 included a net charge of $0.04 and $0.40 per share, respectively, primarily related to charges recorded by our equity method investees, restructuring charges and asset write-downs," the company noted.
In volume terms, Coca-Cola said unit case sales were up by 4% in the quarter and by 3% in the half-year, driven by strong performances in India and China. The company also commended the performance of its juices and juice drinks, sports drinks, teas and water brands for driving volumes.
Company chairman and CEO, Muhtar Kent, said today: "We continue to deliver solid operating performance. In the first half of the year, we delivered volume and profit results in line with our long-term growth targets, despite very challenging global economic conditions.
"Our investments in key growth markets contributed to the good performance in China, Mexico, India and Brazil," Kent added. "With our disciplined approach to productivity initiatives, we remain on track to achieve our $500m target in annualised savings by 2011 and expect to deliver more than half of the savings by the end of this year."
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