Profit rose nearly 10% at Coca-Cola (KO) - Get Report, reflecting growth in several markets and positive currency exchange, but the soft-drink giant warned that certain key countries could provide challenges for the second half of the year.
The company said after the bell Thursday that net income rose to $1.58 billion, or 65 cents a share, from $1.36 billion, or 55 cents a share. The latest quarter included a gain of 1.5 cents due to a favorable tax settlement and a stock issuance gain.
The results beat a consensus analyst estimate of 63 cents a share, excluding the gain.
Worldwide unit case volume increased 1% in the second quarter and 2% in the first six months. Key contributors to unit case volume growth in the quarter included Japan, North America, China, Brazil, Argentina, South Africa and Turkey. Partially offsetting these trends were unit case volume declines in Germany, the Philippines, Mexico and Indonesia.
Revenue rose 5% to $6 billion, reflecting an increase in gallon shipments of 5%, improved pricing of concentrate and positive currency trends, offset by the impact of creating a supply chain management company in Japan and consolidating certain bottling operations, which are considered variable interest entities.
For the first six months of the year, gallon shipments rose 5%, consistent with the growth in reported unit cases. During the second half of 2004, gallons are expected to grow at a slower rate due to the timing of shipping days.
"Our results in the quarter reflect solid performance in many markets, but we are experiencing challenging conditions in several key countries, including Germany, Mexico and the Philippines," said Neville Isdell, chairman and chief executive. "Within these markets, we expect the environment to remain difficult throughout the remainder of this year while we focus on improving our short-term performance and strengthening our system's long-term capabilities."
Shares of Coke closed down 23 cents to $48.97.