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Coke gulps lower profits
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April 15, 1998: 11:12 a.m. ET
Weak Asian currencies spill over onto first-quarter earnings at soft drink giant
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NEW YORK (CNNfn) -The Coca-Cola Co. on Wednesday reported lower earnings but met Wall Street projections in the first quarter as currency crises in Asia kept a cap on revenue growth at the soft drink giant.
The Atlanta-based company said first-quarter 1998 earnings fell to $857 million, or 34 cents a fully diluted share, vs. $987 million, or 39 cents a share, in the same period a year ago.
Basic earnings per share in the first quarter 1998 were 35 cents a share, in line with analysts' expectations as compiled by First Call.
Investors responded by sending Coke shares (KO) down 1-1/4 at 76-9/16 in Wednesday morning trading on the New York Stock Exchange.
"While there are difficult economic environments throughout Asia, our fundamental business remains strong," said Douglas Ivester, Coke's chairman and chief executive officer.
Revenues rose 8 percent, to $4.6 billion from $4.1 billion in the first quarter of 1997.
"The quarter was uncharacteristically slow for Coke," said Ken Shea of S&P Equity Group. "But I think most analysts realized the currency problems were going to affect the top line."
"But margins were up in a tough quarter, and its market share was up," he added.
Operating income rose 12 percent to $1.3 billion, despite the impact of a stronger dollar and the cost of marketing initiatives.
Coke reported a 14 percent surge in unit case volume in the first quarter of 1998, due in part to the benefit of additional shipping days in the quarter this year. Gallon shipments climbed 15 percent.
Coke said strength in its Barq's root beer, Powerade sports drink, Fruitopia juices and Nestea units added to the growth.
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Coca-Cola
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