Strong quarter boosts Coca-Cola confidence

NEW YORK • Coca- Cola Co.’s bid to slim down operations is showing signs of paying off.

The soda giant posted second- quarter profit on Wednesday that beat analysts’ estimates by a penny a share. A combination of cost cutting and higher drink prices helped the company weather sales declines, brought on in part by efforts to spin off its bottling operations around the world.

The results bring a lift to James Quincey in his first quarter as chief executive officer. The 52-year-old, who took the reins from Muhtar Kent on May 1, has vowed to cut costs by an additional US$ 800 million — furthering a productivity push started by his predecessor. He’s also building on Kent’s legacy by completing efforts to offload the bottlers and focusing on revenue growth rather than beverage volume.

“Our performance gives us confidence that we will achieve our full- year financial objectives even in the face of challenging conditions,” Quincey said in a statement.

The shares were l i ttle changed in New York after the results were released. The stock had climbed 9.1 per cent per cent this year through Tuesday’s close.

Excluding some items, earnings amounted to 59 cents a share last quarter. That exceeded the 58 cents predicted by analysts.

While revenue declined 16 per cent to US$9.7 billion, that was a bit better than what Wall Street was expecting. Analysts estimated US$9.65 billion on average.

One of Quincey’s biggest challenges is transforming Coca- Cola from a soda business into a “total beverage company.” That means relying more heavily on water, tea and other drinks to fuel growth — and de- emphasizing its namesake cola.

But carbonated soft drinks still make up the majority of Coca- Cola’s sales. In that category, the company is facing a backlash from increasingly health- conscious consumers, especially in the U.S. To adjust, Coca-Cola has introduced smaller cans and bottles — formats that have f ewer calories while also generating higher margins.