Coca-Cola's earnings rise 11% in quarter Sales of Sprite perk up profits

April 15, 1997|By BLOOMBERG NEWS

ATLANTA -- Coca-Cola Co.'s first-quarter earnings rose 11 percent as sales of Sprite gave Coke its fastest rate of growth in North America in at least five years, the company reported yesterday.

The soft-drink maker's profit from operations rose to $789 million, or 32 cents a share, from $713 million, or 28 cents, in the year-earlier period.

Coke spent heavily on advertising and introduced several products around the world, winning sales at the expense of rival PepsiCo Inc. In the United States, Coke's sales are rising two to three times the industry's average.

"They are just obliterating Pepsi everywhere in the world, especially in the U.S.," said Oppenheimer & Co. analyst Roy Burry.

Coke shares rose $1.875 to $55.625 yesterday. Trading volume was 4.5 million shares, compared with its three-month daily average of 3.5 million.

Revenue fell 2 percent to $4.14 billion from $4.22 billion, largely because Atlanta-based Coca-Cola sold several bottlers in Europe as well as the rise of the dollar.

Global case sales rose 9 percent and shipments of soda concentrate rose 7 percent, exceeding Coke's estimates.

U.S. sales were led by Sprite. Coke expects sales of the lemon-lime beverage to approach 1.5 billion cases this year, said Sergio Zyman, the company's chief marketing officer.

U.S. sales also rose on Fruitopia juice and tea drinks and Barq's root beer, said Emanuel Goldman, an analyst with PaineWebber Inc.

European sales rose 11 percent on higher demand in Eastern Europe.

U.S. and Europe offset lower-than-expected sales in several other key regions. Sales fell 2 percent in Germany, Coke's biggest European market, and rose a less-than-expected 19 percent in China, considered a crucial market to Coke's long-term growth. In the fourth quarter, sales in China rose 40 percent.

Pub Date: 4/15/97

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