Coca-Cola Co., the world’s largest soft-drink maker, said fourth-quarter profit rose 13 percent as sales volume gains in North America helped counter lower demand in Europe.
Net income climbed to $1.87 billion, or 41 cents a share, from $1.66 billion, or 36 cents, a year earlier, Atlanta-based Coca-Cola said today in a statement. Excluding restructuring costs and other items, profit was 45 cents a share, compared with the 44-cent average of 13 analysts’ estimates compiled by Bloomberg.
Chief Executive Officer Muhtar Kent has responded to consumer demand for healthier beverages with products such as Simply Orange and Honest Tea. The company, which now bottles about 80 percent of its drink volume in the U.S., announced today it was paring the number of distribution regions in its bottling unit to reduce costs and improve efficiency.
“Global diversification continues to pay dividends for the company even though you might have a little bit of softness in some regions like Europe, China or North American carbonated soft drinks,” Thomas Mullarkey, an analyst for Morningstar Inc. in Chicago, said today in an interview. “It’s still able to grow unit case volume globally.”
Mullarkey has a three-star rating on the shares, equivalent to a hold.
Coca-Cola fell 0.4 percent to $38.61 yesterday in New York. The shares had increased 6.5 percent this year through yesterday, compared with a 6.4 percent gain for the Standard & Poor’s 500 Index.
Global volume sales rose 3 percent, helped by a 1 percent gain in North America. That fell short of the 5.4 percent global growth estimated by Mark Swartzberg, an analyst at Stifel Nicolaus & Co. in New York who has a hold rating on the shares.
Revenue advanced 3.8 percent to $11.46 billion. Analysts estimated $11.5 billion.
North American sparkling beverage volume declined 2 percent in the quarter, while still beverage volume advanced 8 percent, driven by demand for Powerade energy drink.
The company is reorganizing its Coca-Cola Refreshments bottling unit from seven into three regional territories -- East, Central and West. Kent has worked to restructure distribution in the U.S. since buying the North American operations of Coca-Cola Enterprises Inc. in 2010.
“We are taking this action as part of our ongoing effort to further improve our processes and systems, and to ensure greater operating effectiveness and productivity across our North America operations,” Coca-Cola said in the statement.
Coca-Cola is trying keep U.S. sales growing amid criticism that sweetened drinks contribute to the nation’s obesity epidemic. The company last month started airing advertisements to bring attention to the importance of exercise and calories in curbing obesity. The first two-minute spot aired on cable television on Jan. 14, highlighting Coca-Cola’s low- and zero- calorie products.
Volume in Europe declined 5 percent in the quarter as economies in the region struggled. Euro-area economic data due this week is expected to show the worst quarterly decline in output for almost four years.
Euro-area gross domestic product shrank 0.4 percent in the fourth quarter, according to the median of 45 estimates gathered by Bloomberg News. That would be the biggest decline since the first quarter of 2009, when GDP fell 2.8 percent in the wake of the collapse of Lehman Brothers Holdings Inc. The data is due to be published on Feb. 14.