Coca-Cola profits beat analysts’ estimates

Coca-Cola, the world’s largest soft-drink company, has posted fourth-quarter profit that beat analysts’ estimates.

It comes after chief executive officer Muhtar Kent’s $3bn (€3.9bn) cost- cutting programme helped improve margins.

Earnings were 38 cents a share in the period, excluding some items, the Atlanta-based company said in a statement yesterday.

Analysts estimated 37 cents on average.

Keeping a tighter lid on expenses helped Mr Kent cope with the crushing impact of the strong US dollar, which has reduced the value of Coca-Cola’s sales in other countries.

The CEO cut expenses and revamped the company’s bottling system.

It also introduced more package sizes last year to counter declining soda consumption in the US and other major markets.

The soda maker was also helped by low commodity costs, even as some overseas economies showed signs of faltering last quarter.

“We delivered on this plan despite an increasingly challenging global macro-economic environment,” Mr Kent said in the statement.

The currency impact contributed to an 8% decline in operating revenue, which came in at $10bn last quarter.

The company also had six fewer days in the period than a year earlier.

Analysts had estimated $9.89bn on average, according to a survey.

Coca-Cola also said on Tuesday it will complete the sale of its wholly owned US bottling plants three years early. It also said it is widening the programme to sites in China.

Franchise partners will run all bottling facilities in North America by the end of 2017, including all cold-fill production sites, the company said.

Coca-Cola also reached a preliminary agreement for partners Cofco and Swire Beverage Holdings Ltd. to take over bottling operations it owns in China.

“The acceleration of our global refranchising marks a step change in our efforts to refocus the Coca-Cola on its core business of building strong, valuable brands and leading a system of strong bottling partners,” Mr Kent said.

Coca-Cola has been shifting US bottling plants to franchise operators since 2013.

It has outlined a disposal of nine sites in September.

The strategy lets Coca-Cola focus on more the profitable business of producing drink concentrates and syrups.