WASHINGTON, USA: Soft drinks king Coca-Cola reported a fall in earnings for the first quarter as sales sagged in the key US and European markets and restructuring costs in the USA hurt the company's profits.
Coke's net income for the quarter to March fell 14.8% to a lower-than-expected US$1.75bn, compared with $2.05bn a year earlier.
Operating revenues were down by 1% to $11.04bn, while operating income fell 4% to $2.41bn.
Earnings per share fell six cents to 39 cents.
Coke said operating income in the crucial North American region fell 24%, mainly because of investments in the productivity and reinvestment programmes that are underway.
Sales in Latin American grew 4%, to a level surpassing Europe, where sales edged lower amid the prevailing recessionary conditions.
Sales in the Eurasia and Africa division jumped 9%, mainly due to the company's acquisition of Saudi Arabia bottler Aujan.
The company "once again delivered solid growth against the backdrop of a still uncertain global economy," said Coke chairman and chief executive Muhtar Kent in a statement.
"Guided by our 2020 Vision we enter 2013 - the fourth year of our journey to 2020 - on track to reach our goals," Kent claimed.
The company announced a major effort to better carve up its territories with five major US bottlers bottling Coke's beverages: Coca-Cola Bottling Company Consolidated; Coca-Cola Bottling Company United; Swire Coca-Cola USA, Coca-Cola Bottling Company High Country and Corinth Coca-Cola Bottling Works.
The effort "might include an outright territory sale, a territory swap, or a sub-bottling arrangement, under which the bottler would make ongoing payments in exchange for exclusive territory rights," Coke said.
The effort is aimed at "allowing each bottler to better service local customers and provide more efficient execution of our strategies," Coke added.
Source: AFP via I-Net Bridge
