Coke Earnings Down 24% in Q2

Earnings per share for the second quarter of 2007 were $0.80 and included a net charge of $0.05 per share, primarily related to restructuring charges and a non-cash impairment charge at an equity investee.

18/07/08 The Coca-Cola Company reported second quarter earnings per share of $0.61, a decrease of 24 percent versus the prior year on a reported basis, and $1.01 after considering items impacting comparability, an increase of 19 percent. Earnings per share for the quarter included a net charge of $0.40 per share primarily related to a non-cash impairment charge at Coca-Cola Enterprises Inc. ("CCE"), an equity investee. Earnings per share for the second quarter of 2007 were $0.80 and included a net charge of $0.05 per share, primarily related to restructuring charges and a non-cash impairment charge at an equity investee.

"Our results in the quarter underscore our ability to continue delivering volume growth and double-digit comparable earnings per share growth, despite the combined impacts of several one-off events and a more challenging economic environment," said Neville Isdell, chairman of the Board, The Coca-Cola Company. "We continue to manage the business for the long term by investing in brand building and innovation with an unrelenting focus on improving our effectiveness and efficiency. We have made significant progress since the turnaround began in 2004 and I am confident going forward under Muhtar’s leadership that the business will continue to be managed by investing for long-term sustainable growth and value."

President and Chief Executive Officer Muhtar Kent said, "Our second quarter performance demonstrates our ability to leverage the strengths of our system to achieve balanced growth. Our results were once again led by our international operations, which delivered 5 percent unit case volume growth, and we maintained volume in North America despite significant challenges. Latin America continues to be a key contributor to our results, along with solid performance in many of our emerging markets including China, Turkey, India, Eastern Europe, Southern Eurasia, North and West Africa and the Middle East. We have accelerated our global volume and value share gains as consumers connect with our brands and our system executes in the marketplace.

"We are clearly operating in a more challenging macroeconomic environment. A strength of our system is the ability to work with our bottling partners and customers to understand the local factors impacting consumer behavior, adjust our plans where appropriate, while continuing to invest and build share for the long term. Both the fundamentals of our business and the strength of our brands remain solid. Through our focus on superior execution and driving productivity, I remain confident we are building a stronger Coca-Cola system for the future."

Second quarter net operating revenues increased 17 percent. Revenue growth reflected a 3 percent increase in concentrate sales, a 2 percent increase from structural changes primarily resulting from acquisitions of certain bottlers, a 3 percent benefit from pricing and mix and a 9 percent positive currency impact.

Operating income in the quarter increased 18 percent on a reported basis and 20 percent after considering items impacting comparability. Items impacting comparability negatively affected second quarter pre-tax operating income by $97 million in 2008 and by $48 million in 2007. Currency benefited operating income in the quarter by 11 percent.

Year-to-date, the Company repurchased $1.0 billion of its stock and intends to repurchase a total of $1.75 to $2.0 billion of its stock for the full year. The Company is targeting $400 to $500 million in annualized savings from productivity initiatives by year-end 2011 to provide additional flexibility to invest for growth.

Unit case volume increased 3 percent in the second quarter and 4 percent year-to date, successfully cycling 6 percent growth in the prior year quarter and year-to date periods. Acquisitions contributed 1 point of unit case volume growth for both the quarter and year-to-date.

International operations delivered 5 percent unit case volume growth in the quarter, successfully cycling 9 percent growth from the prior year quarter. Solid growth across Latin America and in key emerging markets including China, Turkey, India, Eastern Europe, Southern Eurasia, North and West Africa and the Middle East continued to drive the results. North America unit case volume was even in the quarter, while unit case volume in Japan and the European Union Group were each down 1 percent.