China considers same tax rate for domestic, overseas firms (AFP)
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Coca-Cola profit tops view; shares rally (Reuters)
2008.10.15By Martinne Geller 31 minutes ago
NEW YORK (Reuters) - Coca-Cola Co (KO.N) posted a better-than-expected quarterly profit on strong international demand that offset a drop in volume at home, sending shares of the world's largest soft-drink maker up 6 percent.
Coke's results on Wednesday bolstered investors' hopes that the company would prove resilient in a weak U.S. economy. Rival PepsiCo Inc (PEP.N) posted a disappointing profit a day earlier and cut its full-year forecast, saying consumers were drinking more water from the kitchen tap to save money.
Coke's net income rose 14 percent to $1.89 billion, or 81 cents per share, in the third quarter ended on September 26 from $1.65 billion, or 71 cents per share, a year earlier.
Excluding restructuring charges and costs from productivity initiatives, the company earned 83 cents a share, topping the analysts' average forecast of 77 cents, according to Reuters Estimates.
"The ongoing global slowdown is not yet evidenced in Coke's business," wrote Deutsche Bank analyst Marc Greenberg in a research note, though he questioned "whether it was the last great quarter or if Coke runs the last great consumer staples business."
Revenue rose 9 percent to $8.39 billion, helped by the relative weakness of the U.S. dollar, which boosts the value of international sales.
"Our international operations, in particular the emerging markets, continue to drive our growth, more than offsetting the challenges that we are addressing in North America," Chief Executive Muhtar Kent said in a statement.
The company pointed to double-digit sales increases in countries like China, Turkey, India and Nigeria.
Coke expects operating conditions in North America to remain difficult into 2009, Kent said.
Global sales by volume increased 5 percent. International volume rose 7 percent, but that growth was partly offset by a 2 percent decline in North America, where cash-strapped consumers are dining out less often and making fewer trips to gas stations and convenience stores.
Carbonated soft drinks such as Coca-Cola, Fanta and Sprite saw volume increase 3 percent worldwide in the quarter, while beverages like Minute Maid juice and Glaceau vitaminwater grew 10 percent.
Chief Financial Officer Gary Fayard said the third-quarter currency benefit was bigger than expected and should be a bit weaker in the fourth quarter.
Given the recent fluctuations in currency trading, Fayard said "it would be impractical" to say how currency would impact sales and profits in 2009.
Coke said it was on track for its productivity initiatives to deliver $400 million to $500 million in annual savings by the end of 2011.
Coke shares, which had fallen nearly 29 percent this year through Tuesday's close, were up $2.65 at $46.38 on the New York Stock Exchange. Pepsi slipped 30 cents to $54.10.
(Reporting by Martinne Geller; Editing by Lisa Von Ahn)
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