Coca-Cola Co reported on Tuesday profit above expectations as the worlds biggest beverage company benefited from larger volumes and cost cuts.
Net income for the three months ended December 31 stood at $770 million, or $0.17 per share, compared to $1.71 billion, or $0.38 cents a share, a year ago. Excluding some items, per-share earnings were $0.44, up from the $0.42 a share analysts polled by Bloomberg had projected.
Revenue dropped 2% to $10.9 billion versus forecasts of $10.8 billion. Coca-Cola said sales increased 4%, excluding the impact of currency shifts.
The drinks giants results has been hit by a stronger dollar, reducing profitability from the companys overseas operations, which generate the better half of overall profits.
Sluggish global growth and political uncertainty in Europe also dragged down results. Coca-Cola sells its products, including Fanta, Sprite and Schweppes, in every country in the world, with the exception of Cuba and North Korea.
Last October the company announced a cost-reduction program with the aim to lower the companys expenses by $3 billion by 2019.
In line with the plan, Coca-Cola started parting ways with employees across the world. The company said it would reduce its white-collar workforce by between 1 600 and 1 800 employees.
Additionally, the company said it would use some of the savings to fund marketing campaigns and innovation for its brands.
During the quarter the company reported a 1% increase in world-wide volumes, driven by higher sales of Coca-Cola, Fanta and Sprite.
Sales of non-carbonated drinks or “still” as the company calls them increased 2% globally, slightly offset by lower demand for juice and juice drinks, due to higher prices.
Coca-Cola warned that it expects lower growth in gross profit and operating income in 2015, with the stronger dollar cutting revenue by 5 percentage points and pre-tax profit by 7 to 8 percentage points.
Excluding currency shifts the company expects per-share earnings to increase by a mid-single digit, or about the same growth rate as in 2014.
“We continue to see 2015 as a transition year as the benefits from the announced initiatives will take time to materialize amidst an uncertain and volatile macroeconomic environment,” said Chief Executive Muhtar Kent.
Coca-Cola lost 0.53% on Monday and closed at $41.23 in New York. On Tuesday the stock climbed 3.03% to $42.48 at 16:03 GMT, marking a one-year increase of 10.16%. The company is valued at $180.59 billion.
According to the Financial Times, the 20 analysts offering 12-month price targets for Coca-Cola have a median target of $45.00, with a high estimate of $52.00 and a low estimate of $37.00. The median estimate represents a 9.14% increase from the last closing price.
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