(Corrects 10th paragraph to Coca-Cola brand helping the overallbusiness deliver 181 billion servings in the quarter, notdelivered alone)
By Atossa Araxia Abrahamian
Oct 15 (Reuters) - Coca-Cola Co on Tuesday reported ahigher quarterly profit and said it was on track to achieve itsgoal of doubling its 2010 "system revenue," which includes itssales and those of its bottlers, by 2020.
On a conference call, Chief Executive Officer Muhtar Kentsaid the world's largest soft drink company would proceed byinvesting in its brands and seeking acquisitions.
"There's some headwind in emerging markets, but we believethey are very temporary" because the middle class in thosecountries is growing, he said.
In the third quarter, net income rose 6 percent to $2.45billion, or 54 cents per share, in the third quarter from $2.31billion, or 50 cents per share, a year earlier.
Excluding special items such as transaction gains and taxmatters, earnings were 53 cents per share, in line with whatanalysts expected, according to Thomson Reuters I/B/E/S.
Revenue fell 3 percent to $12.03 billion from $12.34billion, slightly below analysts' estimates of $12.05 billion.The decline was largely due to weaker-than-expected currenciesin many emerging markets and the costs of restructuring bottlingoperations in Brazil and the Philippines.
Chief Financial Officer Gary Fayard said he expectedcurrency weakness to hurt operating income by 5 percent to 6percent in the fourth quarter.
STRENGTH OF COKE BRAND
Morningstar analyst Tom Mullarkey said he was encouraged byCoke's global volume growth, which reached 2 percent overall, aswell as the popularity of the Coca-Cola brand in North America.
"Soda is not doing great overall in the U.S.," he said, "butthe Coke brand is the leading soda brand, and so the companycontinues to push it forward."
Kent said the Coke brand was resilient, helping the companydeliver a record 181 billion beverage servings in the quarter.
Shares of Coca-Cola, which generates almost 60 percent ofits revenue from international markets and nearly 70 percentfrom soft drinks, were up 0.2 percent at $37.97 in middaytrading.
In North America, sales volume increased 2 percent overall,largely because of the strong performance of Coke's non-sodaofferings. Still-drink and bottled water sales rose 5 percent,and teas, which include Honest Tea and Fuze, had double-digitpercentage growth. Sparkling drink sales in the region wereflat.
Volume rose 5 percent in the Asia-Pacific region, led bygrowth of 21 percent in Vietnam.
In China, volume increased 9 percent, including an 8 percentrise in soft drinks, without any significant pricing promotions.Executives said the nation had stabilized economically, and itspeople had more disposable income.
Volume rose 4 percent in Eurasia and Africa, fell 1 percentin Europe and stayed flat in Latin America, in part becausestorms hampered beverage sales in Mexico.
Also in Mexico, the government said in September that it wasplanning on levying taxes on soda to combat obesity. "Aregressive discriminatory tax on one part of the food industryjust is not going to work," Kent said Tuesday's call.
Kent later told reporters that the company was not even surethe tax would become law.
To capitalize on the 2014 FIFA World Cup, Coca-Cola hasalready begun its largest soccer-related marketing campaign,which will cover more than 170 markets.
The company said it had repurchased $2.8 billion in stock in2013 and planned to increase that amount to between $3.0 billionand $3.5 billion for the full year. (Reporting by Atossa Araxia Abrahamian; Editing by Lisa VonAhn)
- Consumer Discretionary
- Company Earnings
- Muhtar Kent