FILE PHOTO – A detail of a can of Coca-Cola is seen in London, Britain March 16, 2016. REUTERS/Stefan Wermuth/File Photo
October 25, 2017
(Reuters) – Coca-Cola Co’s <KO.N> quarterly profit and revenue topped analysts’ estimates, helped by a 3 percent rise in North American sales as it gains market share over arch rival PepsiCo Inc <PEP.N>.
The company sold more Sprite, teas and coffees during the quarter, offsetting a dip in Diet Coke sales.
In contrast, PepsiCo reported a drop in quarterly beverage sales in North America for the first time in two years, hit by weak demand for Gatorade and marketing missteps.
“Coca-Cola is clearly gaining share as evidenced by the very wide performance gap between itself and PepsiCo,” RBC Capital Markets analyst Nik Modi wrote in a note.
Analysts have attributed Coca-Cola’s market share gains to its franchising initiatives and a more aggressive push to sell juices, teas and vitamin water.
Its recent acquisitions in the non-soda category include salty mineral water brand Topo Chico, Honest Tea and Unilever’s <UNc.AS> AdeS soy-based beverages.
Beverage makers have been hit by consumers opting for healthier drinks, particularly in the United States, and growing pressure from health experts who have blamed sugary drinks for a rise in obesity.
Refranchising bottling operations has helped Coca-Cola eliminate costs of operating a low-margin business and gives it a more predictable revenue stream.
Cost of goods sold fell 18 percent in the quarter, and general and selling expenses dropped 20 percent.
Net income attributable to Coca-Cola’s shareholders rose to $1.45 billion, or 33 cents per share, in the third quarter ended Sept. 29, from $1.05 billion, or 24 cents per share, a year earlier.
Excluding items, the company earned a profit of 50 cents per share, beating the average analyst estimate of 49 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 14.6 percent to $9.08 billion as the company refranchised some bottling operations, but beat the average estimate of $8.72 billion.
Coca-Cola’s shares, which have risen 11.3 percent this year, were little changed in premarket trading on Wednesday.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Saumyadeb Chakrabarty)
