Coke beats forecasts but cuts its sales projections

Coca-Cola has reported first quarter earnings ahead of forecasts, but lowered its sales projections for this year and next.

Wall Street analysts have been sceptical about the world's biggest soft drink company's ability to meet its sales volume projections.

During the first three months of 2001, Coke earned $863m, or 35 cents per share, compared with a loss of $58m, or 2 cents per share, in the same period a year ago. Analysts surveyed by Thomson Financial/First Call had forecast earnings of 33 cents per share.

Citing a weak economy and its first-quarter performance, Coke said it expected sales volume growth of between 5% and 6% annually until 2002, down from the previous estimate of between 6% and 7% this year and 7% to 8% next year.

Coke's chairman and chief executive Douglas Daft said the revision in forecasts of volume growth resulted from a comprehensive review "of all factors impacting our system".

He said: "Over the past year, we have strengthened our platform to deliver long-term shareowner value. More importantly, we will continue to do so over time. Our success will be driven not by short-term financial goals alone, but by our system's ability to capitalise on our key competitive advantages."

The company said it remained comfortable with forecasts of earnings growth per share ranging from 11% to 12%.

Revenue for the most recent quarter increased by 5% to $4.47bn from $4.25 bn in the first quarter of 2000.

Worldwide case volume rose 4%, helped by 10% increases in Africa and Asia. Those results were offset by a 14% decline in sales in Germany and Turkey.

Coke said new management and marketing were expected to revive German sales this year, while economic turmoil in Turkey continued to harm sales there.