Coca-Cola’s Q1 earnings fall 15%

Print This Post A A A

Coca-Cola’s first-quarter earnings have dropped 15 per cent partly due to restructuring costs, though unit case volumes edged up.

The world’s largest beverage company also unveiled a new partnership model on Tuesday.

Coca-Cola has seen its results challenged by Americans reducing their soft-drink consumption, rising costs for raw materials and pockets of economic uncertainty, such as Europe and China.

To better address the changing demands of its marketplace, Coca-Cola reorganised its operating structure around three major businesses: Coca-Cola International, Coca-Cola Americas and Bottling Investments Group, starting January 1.

Coca-Cola reported a profit of $US1.75 billion ($A1.69 billion), or 39 cents a share, down from $US2.05 billion, or 45 cents a share, a year earlier. Excluding items such as restructuring charges, economic hedges and certain tax matters, earnings were 46 cents in the most-recent quarter.

Revenue decreased 0.9 per cent to $US11.04 billion, with two fewer selling days in the most-recent quarter. Worldwide unit case volume climbed four per cent.

In an interview, Coca-Cola CEO Muhtar Kent noted he company has been working to fix a production network in the US that hadn’t been “well thought out.”

For instance, he noted that many bottlers didn’t have the capacity for making its non-carbonated beverages, which often resulted in third-party operators producing them.

Over the years, Kent said Coca-Cola has been bringing that production back in-house. He also noted that further improvements are in store, such as building new plants and consolidating others.

“There’s room for costs to come down,” Kent said. “There’s room for efficiency to increase.”

Meanwhile, Coca-Cola said global volume during its first quarter rose four per cent, with Thailand, India and Russia posting strong gains. In its flagship North American market, volume rose one per cent, fuelled by growth in non-carbonated drinks such as Honest Tea and Simply Orange juice.