Coca-Cola profit falls, but beats estimates

CHICAGO - Coca-Cola Co, the world's biggest soft-drink maker, reported a 28 per cent drop in fourth-quarter profit on higher marketing costs and charges to repatriate foreign earnings.

But excluding one-time items, earnings beat the analysts' average forecast by 2 cents a share, helped by higher-than-expected revenue.

Coca-Cola shares were up almost 1 per cent at US$41.32 ($61.48) on Tuesday morning on the New York Stock Exchange.

The Atlanta-based company, which rolled out a flurry of new products last year and plans to keep up the tempo in 2006, said operating income fell 6 per cent on the planned double-digit increase in marketing and new product development.

Net earnings declined to US$864 million or 36 cents a share, from US$1.2 billion or 50 cents a share, a year earlier.

The 2005 net profit included charges of 10 cents per share for repatriating foreign earnings and for a charge incurred by a bottler in which Coca-Cola invests.

Excluding those charges, earnings were 46 cents a share. Analysts on average had expected 44 cents, according to Reuters Estimates.

"Given low expectations heading into the quarter on concerns about the potential currency impact and volumes in key markets such as Europe and South Asia, Coke's Q4 result is a positive," analyst John Faucher of J.P. Morgan Securities, said in a research note.

Revenue rose 7 per cent to US$5.55 billion, reflecting a 4 per cent increase in gallon sales, a 3 per cent benefit from pricing and mix, and a 1 per cent benefit from structural changes. Analysts had forecast US$5.41 billion, according to Reuters Estimates.

Reigniting anaemic sales of core brands such as the flagship Coca-Cola Classic has been a challenge for the company and its bottlers since the late 1990s, when many consumers started shifting to bottled waters and other healthy drinks.

- REUTERS