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Milwaukee - The Coca-Cola Co. said on Tuesday its third-quarter profit inched higher, though sales fell as consumers continued to limit soft drink purchases and the stronger dollar took a toll on revenue.
The world's biggest beverage maker said it earned $1.896bn, or 81c per share, compared with $1.890bn, or 81c per share, a year earlier.
Atlanta-based Coca-Cola said revenue slumped to $8.04bn from $8.39bn. Foreign currency exchange dragged down revenue by 6 percent.
Analysts polled by Thomson Reuters, who usually exclude one-time items from their estimates, forecast profit of 81 cents per share on revenue of $8.11bn.
Shares of Coca-Cola fell $1.14, or 2.1%, to $53.65 in morning trading on Tuesday.
Worldwide case volume - the amount of product shipped - grew 2 percent in the quarter but in North America, case volume fell 4 percent.
The maker of Coke and Sprite has been navigating a market where consumers have been cutting back on soft drinks amid the recession and increasingly seeking out juices and teas, rather than soft drinks. Coca-Cola said unit case volume for soda fell 5% in North America in the quarter, while volume of still beverages, including teas and juices, was even.
Sales rose in emerging markets including India, China and Brazil. Total international case volume rose 4%, which includes 37% growth in India and 15% in China, where the company has announced a $2bn investment, along with its bottlers, in the next three years.
CEO Muhtar Kent said consumers around the world are hurting financially, which affects their spending on everything, including drinks. Though there have been signs that recovery is under way, that doesn't mean consumers will be quick to boost their spending again.
"I still believe the US is still going to pull the general consumer sentiment up in the world," he said on a conference call. "The US consumers' resiliency we'll probably see that happening, but I just don't have an idea about the timing."
The effect of foreign currency continued to drag down results in the quarter, as it has throughout the year. Coca-Cola said that a US dollar still strong relative to last year's third quarter hurt earnings per share, because about 85% of Coca-Cola's profit comes from sales abroad. A strong dollar dampens foreign sales for US companies, because overseas sales convert back to fewer US dollars.
But Coca-Cola expects foreign currency to benefit the company in the fourth quarter by low to mid-single digits due to anticipated benefits of hedging and a dollar that's now weakening.
Analysts seemed mixed on the results. Stifel Nicolaus analyst Mark Swartzberg said the results were "light versus our expectations". He said North America's volume decline was the largest quarterly decline in the last three years and led by the drop in soft drinks.
But Deutsche Bank-North America analyst Marc Greenberg said the quarter's results were comparable with his expectations and noted strong performance in Latin America and parts of Asia. He boosted his estimates for fiscal 2009 by 2 cents to $3.09 per share, based on improving currency, bottler investments and other factors.
Analysts on average expect earnings per share of $3.06 in 2009.
- AP
