New Coca-Cola CEO James Quincey delivers strong results
By Sruthi Ramakrishnan - Jul 28th, 11:22
Coca-Cola’s profit, in its first quarter under new CEO James Quincey, beat analysts’ estimates on higher demand for its healthier non-carbonated beverages as well as low- and no-sugar versions of its sodas.
Coca-Cola, like rival PepsiCo, has been building its non-carbonated drinks portfolio and stepping up efforts to reduce sugar in its beverages as consumers look for healthier options.
"Organic revenue growth in sparkling soft drinks was led by innovation in and marketing support for our low- and no-sugar options like Coca-Cola Zero Sugar," Quincey said in a statement.
Global volume sales of low- and no-calorie soda drinks rose in the mid-single digits in the second quarter ended June 30, the company said on Wednesday.
The world’s largest beverages maker said it plans to introduce Coke Zero Sugar in the US in August.
Coca-Cola said demand rose for its non-aerated drinks such as innocent juice and smoothies in Europe.
The company is delivering on its strategic priorities — growing soda sales by reducing sugar content, broadening beverage portfolio and using higher prices as a driver of profit, Susquehanna analyst Pablo Zuanic wrote in a note.
The change in strategy is paying off for PepsiCo as well.
Growing demand for higher-margin healthier foods such as baked chips and smaller soda servings helped its profit beat analysts’ estimate this month.
Net income attributable to Coca-Cola’s shareholders fell to $1.37bn, or 32c per share, in the second quarter ended June 30, from $3.45bn, or 79c per share, a year earlier.
Coca-Cola incurred a charge of $653m related to refranchising its North America bottling operations, as the company continues to sell most of its low-margin bottling business to cut costs.
Excluding items, Coca-Cola earned 59c per share, beating the average analysts’ estimate of 57c, according to Thomson Reuters IBES.
Revenue fell 16% to $9.7bn, hurt by the refranchising of bottling territories and a strong dollar.
However, revenue beat the average analysts’ estimate of $9.65bn.
The company also forecast adjusted 2017 profit to be flat or down 2%, compared with its previous forecast of a 1%-3% decline, citing lower impact from currency exchange rates. © BusinessLIVE MMXVII
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