Coca-Cola Co.'s revenue and profit grew in the first quarter as the company sold more soft drinks and juice around the world, but the financial results fell slightly short of analysts' estimates.
Coca-Cola's global sales rose 40 percent to $10.5 billion, reflecting growth in concentrate sales, benefits from currency fluctuations and the acquisition of bottler Coca-Cola Enterprises’ North American operations.
The company reported earnings of $1.9 billion, up 18 percent from $1.6 billion in the same period a year ago. Coca-Cola earned 82 cents per share, up from 69 cents in the first quarter of 2010.
The results were "slightly disappointing, given consistent ‘beats' over the last few years," said UBS analyst Kaumil Gajrawala, who noted that revenues were below expectations in all regions but Latin America.
But "over the long run, we are confident in the company’s ability to execute," Gajrawala continued.
Shares slid 1.2 percent on the New York Stock Exchange on Tuesday.
Coca-Cola said its exposure to prices for commodities such as the raw materials for plastic bottles has increased by $250 million and $300 million this year. Higher average prices -- including more purchases of chilled drinks, which sell for more -- would help compensate for that volatility, executives said.
In the first quarter, global sales volume rose 6 percent. Each of Coca-Cola's five geographic operating groups grew, including North America, which posted 6 percent growth.
In Europe, "the tale of two regions continues," said Credit Suisse analyst Carlos Laboy. The region's 1 percent growth was a bit weaker than expected, he wrote. "We suspect the volume weakness was driven mainly by Eastern Europe vs. the West which we believe is performing well."
In North America, Powerade posted 21 percent growth, Coca-Cola Zero grew by double digit percentages for the 20th straight quarter, Sprite grew for the fourth consecutive quarter and Fanta posted its third consecutive quarter of growth. It was the fourth consecutive quarter of growth in North America. But sales of the company's soft drinks slipped 1 percent without the impact of cross-licensed brands such as Dr Pepper.
Chief executive Muhtar Kent said the company would not be able to gauge the full effect of higher fuel prices until the end of the summer.
"We are winning share in the marketplace," Kent said. "There is no question that we are all experiencing the challenges of a complex global geopolitical environment. Our system has only just begun to achieve its full potential."
