Some of Georgia's largest companies saw big increases in revenue in the second quarter. But midway through a rocky year, those numbers masked wide variations in how the companies are dealing with economic uncertainty. Many of them are scaling back their ambitions.
"We are a business that's built for times like these," Coca-Cola chief executive Muhtar Kent said on CNBC on July 19, shortly after the company announced higher second-quarter sales and profit. "No question, though: It's tough out there."
Coca-Cola, which does the large majority of its business outside the United States, benefited from the weakness of the U.S. dollar in the second quarter. In its home market, though, consumers were battered by weakness in the construction industry, high unemployment and higher food costs.
There is much "mist and the fog in front of the consumer in the U.S. today," Kent said told The Atlanta Journal-Constitution.
Preparing for high fuel prices over the long term and bending to the slow economic recovery, Delta Air Lines will cut flight schedules more than previously planned, retire more planes and offer buyouts to employees.
Delta is assuring Wall Street that it is serious about cutting its long-term debt, much of which came with its acquisition of Northwest almost three years ago.
"We will resize the airline," chief executive Richard Anderson said. "We are determined to fix the business."
Likewise, SunTrust Banks' latest quarterly report was a mix of good news for investors and worrisome news for employees.
Atlanta-based SunTrust reported its fourth consecutive quarterly profit, but it signaled that job cuts could be coming as the company aims to reduce expenses by $300 million through 2013.
The company plans to streamline departments such as technology, operations, marketing and human resources. Executives said attrition and eliminating empty positions could help SunTrust reach its cost-cutting goals, but they aren't ruling out layoffs.
Banking industry experts predict more mergers and acquisitions but not a lot of hiring until banks have more clarity on regulation, taxes, government spending and consumer confidence. That clarity could be slow in coming.
Meanwhile, many banks are looking to cut jobs, principally out of fear of higher regulatory costs and lower profit margins.
Columbus-based insurer Aflac saw its business grow in the second quarter in Japan, where it records 75 percent of its sales. Aflac reported higher operating profit, or profits from continuing operations. That was partly because of the continued weakness of the U.S. dollar, which boosts profits for companies that do large chunks of business in foreign currencies.
But soured investments in European markets were responsible for a huge one-time charge that dropped Aflac into a $668 million pretax loss for the quarter. So far this year, Aflac has lost more than $1 billion related to financial institutions in Greece, Ireland, Portugal and Spain.
Atlanta-based Home Depot raised its earnings guidance after announcing a very profitable second quarter in which it beat archrival Lowe's in stores open at least a year. It was the ninth consecutive quarter in which Home Depot surpassed Mooresville, N.C.-based Lowe's in that closely watched metric.
Home Depot halted U.S. growth during the downturn. It closed stores, shuttered some divisions and focused on low prices. The company trimmed its capital spending plan for this year by $75 million, down to $1.275 billion, primarily because it plans to open fewer new stores. Chief executive Frank Blake said the U.S. housing market is still under stress.
"We do not expect any meaningful improvement in the housing market for the back half of 2011," he told analysts last week. "We will continue to invest in and position our business for recovery."
Newell Rubbermaid, the parent company of Sharpie and Rubbermaid, posted revenue and profits that beat Wall Street's lowered expectations. But the United States and Europe continue to be weak spots. The baby and parenting category was one of the main drags on growth, proving more difficult to turn around than previously expected.
Newell Rubbermaid said young parents or couples starting a family -- in other words, potential buyers of Graco strollers, car seats and highchairs -- are some of the most economically stressed consumers in the country.
At UPS, even 8 percent sales growth and the company's highest-ever second-quarter earnings per share could not drown out the tone of uncertainty and low consumer confidence. The Sandy Springs logistics company said the sluggish U.S. economy cast doubt on how lucrative the Christmas shopping season would be.
"There's a lot of uncertainty right now," chief financial officer Kurt Kuehn said. "The verdict is still out. We're looking forward to being Santa's helper, but it's still a little early to see how full the sleigh will be."
~Staff writers Arielle Kass, J. Scott Trubey and Rachel Tobin contributed to this article.
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