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Coke 4Q profit in line
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January 29, 2002: 1:00 p.m. ET
Soft drink maker matches 4Q estimates, warns about volume growth.
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NEW YORK (CNN/Money) - Coca-Cola Co. posted a lower fourth-quarter profit excluding special items Tuesday, matching Wall Street estimates, as the No. 1 soft drink maker was hurt by unfavorable currency transactions and accounting changes.
Additionally, the company warned that volume growth, a key gauge for the beverage industry, could come at the low end of expectations for 2002.
"Given the challenging economic conditions anticipated in the current year, it is reasonable to expect that we might be on the lower end of our long-term range of 5-to-6 percent volume growth," CEO Doug Daft told analysts in a conference call Tuesday.
The company said North American unit case volume grew 2 percent in the fourth quarter, which is flat compared with a year earlier. Worldwide case volume growth was also flat at 4 percent.
Case volume rose slightly in Europe, Asia and Africa but slipped in Latin America, the company said.
For the quarter, Atlanta-based Dow component Coke (KO: down $0.44 to $44.77, Research, Estimates) reported net earnings of $914 million, or 37 cents a share, up from $242 million, or 10 cents a share, a year earlier. Analysts on average anticipated a profit of 37 cents a share, according to earnings tracker First Call.
However, excluding about $700 million in charges, Coke's profit in the fourth quarter of 2000 was $942 million, or 38 cents a share, according to First Call.
Fourth-quarter revenue increased to $4.9 billion from $4.7 billion.
The company reported strong sales of juice, water and other non-carbonated beverages in the quarter, reflecting efforts to keep pace with rival Pepsico Inc. (PEP: down $0.90 to $47.73, Research, Estimates) in capitalizing on a growing consumer shift away from carbonated drinks, analysts have said.
Coke also said it anticipates 2002 earnings to grow at previous expectations of 11 percent to 12 percent excluding the impact of currency transactions, which would be in line with analysts' expectations of $1.78 a share, according to First Call. However, exposure to Argentina could reduce 2002 earnings by 8 cents to 10 cents a share, the company said.
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Additionally, the company expects to take a $1 billion non-cash charge in the first quarter reflecting a change in the way it records the value of intangible assets.
For the full year, Coke earned $4 billion, or $1.60 a share, compared with earnings of $2.2 billion, or 88 cents a share, a year earlier. The year-earlier results include special items.
Full-year results include a third-quarter non-recurring gain of $91 million before taxes from the common stock offering by Coca-Cola Enterprises (CCE: down $0.17 to $16.63, Research, Estimates) for an acquisition.
Coke said cash flow remained strong in the fourth quarter with net cash from operating activities coming in at more than $4 billion for the year, up from $3.6 billion a year ago. The company generated more than $3 billion in free cash flow after business reinvestment. 
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