Coca-Cola goes abroad for growth

It was a rough year for the American consumer, but it ended pretty well for Coca-Cola Co.

The Atlanta-based company posted fourth-quarter financial results that pleased Wall Street, despite an unsteady U.S. economy and falling sales in its North American backyard. Worldwide, sales volume grew 5 percent in the last three months of 2009 and 3 percent for the year. Sales of Coca-Cola’s flagship brand rose 4 percent in the fourth quarter.

Profits and revenues both rose, as did the company’s stock on Tuesday. Shares jumped 3 percent to $54.27 at mid-afternoon.

“The name of the game is strengthening your brand,” chief executive Muhtar Kent told the AJC. “That has been done now, in the course of a difficult year.”

Coca-Cola, the world’s biggest beverage company, posted net profit of $1.54 billion in the fourth quarter, up 55 percent from a year earlier. Earnings per share rose to 66 cents from 43 cents. (If currency swings were excluded, earnings were up 3 percent.) Revenue for the fourth quarter rose 5 percent to $7.5 billion.

Coke stuck with its goal to save $500 million in costs annually by the end of 2011. It ramped up its marketing spending in the fourth quarter, looking towards a string of high-profile events including the Super Bowl, the Vancouver Olympics, the World Cup in South Africa and the Shanghai World Expo.

For the full year, profit rose 18 percent to $6.82 billion, despite a 3 percent drop in annual revenue.

Coke owed its success to international markets. New sales in China Mexico, India and Brazil were equivalent to adding “another Germany” to total sales, Kent told analysts on a conference call Tuesday. Sales in the Pacific region -- encompassing China, Thailand, Australia, the Philippines, Korea and Vietnam -- climbed 11 percent, fastest rate among global regions.

China, where Coke said it posted its 26th consecutive quarter of growth, was particularly strong, said J.P. Morgan analyst John Faucher.

“We consider today’s news another validation” for Coca-Cola, wrote Stifel Nicolaus analyst Mark Swartzberg.

But North America continues to lag. Sales measured in cases fell 1 percent in the fourth quarter and 2 percent for the year.

Still, Kent said Coke’s performance in North America improved over the course of 2009, as the company gained market share. Operating income at the division rose 7 percent.