Coca-Cola Q4 profit tops analysts’ estimates amid Asia sales boost

Coca-Cola Co, the world’s largest soft-drink maker, reported fourth-quarter profit that topped analysts’ estimates as teas and juices boosted sales in Asia.

Profit excluding some items was 79 cents a share, Atlanta-based Coca-Cola said yesterday. That exceeded the 77c average of 14 analysts’ estimates compiled by Bloomberg. Net income in the quarter fell to $1.65 billion (€1.25bn), or 72c a share, from $5.77bn, or $2.46, a year earlier, when the company posted a gain from an acquisition.

Chief executive Muhtar Kent is expanding sales of beverages in Asia with global marketing campaigns and products such as its Minute Maid Pulpy juice drink. Fourth-quarter sales volume climbed 5% in Japan and 10% in China.

“Coke’s fourth-quarter results benefited from continued strength from its international beverage portfolio,” Ann Gurkin, an analyst for Davenport & Co in Richmond, Virginia, said. “We also found the continued strong performance by the Coca-Cola and Coke Zero franchises as a standout for the North American segment.”

Coca-Cola shares climbed 6.4% last year, while PepsiCo gained 1.6%.

The company also said it plans to reduce costs by $550 million to $650m by 2015 and use the savings to invest in its brands and mitigate higher commodities prices. Coca-Cola said it exceeded the $500m it sought to cut during the four years that ended in the last quarter.

Coca-Cola, which is facing higher costs for commodities such as plastic and corn-based sweeteners, raised pricing to retailers in North America by 1% for the year, less than the 2% to 3% it forecast in October.

Commodity costs this year may increase as much as $450m from 2011, driven by juice ingredients and sweeteners, chief financial officer Gary Fayard said. Foreign-currency fluctuations may reduce operating income in 2012 by a mid-single digit percentage, Fayard said.

Total sales in the quarter rose 5.2% to $11bn, matching the average estimate of 11 analysts. The Pacific region unit, which includes China and Japan, boosted sales volume 5%. In the company’s Eurasia and Africa group, volume climbed 4% while operating income jumped 16%. Sales volume in India rose 20%.

— Bloomberg