Coke’s profits beat analysts’ forecasts

Coca-Cola, the world’s largest soft-drink maker, has reported first-quarter profit that topped analysts’ estimates, helped by pricing increases and demand in North America.

Net income rose 7.9% to $2.05bn (€1.5m), or 89 cents a share, from $1.9bn, or 82 cents, a year earlier, Atlanta-based Coca-Cola said yesterday.

Analysts projected 87 cents, the average of 14 estimates compiled by Bloomberg.

Chief executive Muhtar Kent has introduced smaller package sizes to attract price-conscious consumers as part of an effort to spur sales in North America, where the soft drink industry is in a seven-year decline.

Beverage sales volume for the unit climbed 2% in the quarter, driven by demand for Powerade energy drinks and Dasani water, contributing to a 5% gain globally.

“Coca-Cola’s volume growth was very strong this quarter and despite commodity pressures and clear marketing reinvestment, they delivered strong profitability,” Ali Dibadj, a New York-based analyst for Sanford C Bernstein & Co, said.

Revenue advanced 5.9% to $11.1bn, according to the statement. The company raised global pricing 3% in the quarter, outpacing last year’s 1.5 increase.

The north America unit, Coca-Cola’s largest, accounted for about 44% of global sales. The Pacific unit, the company’s second-largest region, boosted volume sales 8%, compared with 5% growth a year earlier. The division was helped by a 3% jump in Japan.

In emerging markets, India jumped 20% while Brazil increased 4%, as both outpaced gains in the first quarter a year earlier. China advanced 9%.

Gross margin narrowed to 61% from 62.5% a year earlier.

Coca-Cola employs more than 1,000 people in Ireland.

— Bloomberg