Coca-Cola jumps on strong global sales

The Coca-Cola Company posted a rise in profits on strong international sales that beat analysts' expectations.

NEW YORK (CNNMoney.com) -- Coca-Cola on Wednesday reported a jump on fourth-quarter profit as strong sales in its overseas markets helped to offset continued weakness in soda sales at home.

Coca-Cola (KO, Fortune 500) said net income rose 79 percent to $1.2 billion, or 52 cents a share, in the fourth quarter, up from $678 million in the same period a year earlier. Revenue rose 24 percent to $7.3 billion from $5.9 billion in the fourth quarter of 2006.

Excluding restructuring charges and asset writedowns, earnings for the world's largest beverage maker rose to $1.4 billion, or 58 cents, beating Wall Street's forecasts. Non-GAAP earnings reflect a 12 percent increase over the same period last year, as the company's bottling division took a non-cash impairment charge in the fourth quarter of 2006.

Analysts polled by Thomson Financial had expected the Atlanta-based company to earn 55 cents during the quarter on revenue of $7 billion.

"This growth was balanced across our geographies and portfolio of brands," Coca-Cola chief executive Neville Isdell said in a statement.

Coke's fourth-quarter unit case volume, a measure of total beverage sales in the past three months, rose 5 percent worldwide but only 1 percent in the United States. Total carbonated beverage volume increased 4 percent, and non-carbonated beverages increased 12 percent; however, U.S. soda sales declined 2 percent in the quarter and for the year, while sales of other beverages including water, juices and energy drinks increased 8 percent for the quarter and 5 percent for the year.

Both Coke and No. 2 beverage company Pepsi (PEP, Fortune 500) have seen their share of the North American carbonated beverage market fall recently, as more health-conscious consumers switch to vitamin-infused energy drinks and bottled water.

"The strongest potential for growth is in non-carbonated beverages," said Justin Hott, analyst at Bear Stearns. "I'm not concerned about the U.S. soda sales. Health and wellness is the growing trend... and it's a mature market in the U.S."

Last Tuesday, for example, Coca-Cola purchased a 40 percent stake in Bethesda, Md.-based Honest Tea, a maker of low-calorie tea and juice brands.

"It's not a game changer, but a good move," said Hott, who noted that Coke's decision to leave Honest Tea's people in charge of the brand should result in a mirror of the success of Coca-Cola's takeover of Glaceau.

Though Coke's CEO said the company was encouraged that strong overall sales allowed the company to grow faster than industry, Isdell said "we are by no means declaring victory," in a conference call with investors.

The company acknowledged that they were mindful of the struggling U.S. economy.

"We'll be watching the economy closely," said Coca-Cola's chief operating officer and future CEO Muhtar Kent in the conference call. "[But] our diverse brands, including Vitamin Water, Fuze, Dasani, and our new acquisition of Honest Tea provide the business with a much stronger base on which to build in 2008 ... even with an uncertain U.S. economy."