Earnings

Coca-Cola profit dropped, but it found new customers in Thailand and India

April 16, 2013
April 16, 2013

The numbers: Coca-Cola, the world’s largest soft drinks manufacturer, saw its profit fall 15% year-on-year in the first quarter to $1.75 billion, or earnings per share of $0.39, below a consensus forecast of $0.45. (See chart below.) Coke also reported slightly lower revenue of $11.04 billion, which it attributed to fewer calendar days in the quarter.

The takeaway: Coke has been hit by higher costs of raw materials, economic uncertainty in core markets like Europe, and falling soda consumption in the US.  In a partial move back to Coke’s former franchise model, the company said today it would be selling some of its US distribution territories to independent bottlers.

What’s interesting: As a result of more Americans cutting back on their soda intake, emerging markets matter even more for Coke, which is sold legally in all but two countries in the world (North Korea and Cuba). It’s having luck in some countries. The volume of finished Coke drinks sold in Thailand and India rose by 38% and 30%, respectively, as well as in Russia and China by 15% and 6%.

Coca Cola

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