Coke earnings slip on sagging US

Soft drinks king Coca-Cola reported a fall in earnings for the first quarter Tuesday as sales sagged in the key US and European markets and restructuring costs hit North American profits. Coke's net income for the quarter to March 31 fell 14.8 percent to a lower-than-expected $1.75 billion, compared to $2.05 billion a year earlier. Operating revenues fell 1 percent to $11.04 billion, while operating income fell 4 percent to $2.41 billion. Earnings per share fell six cents to 39 cents. Coke said operating income in the crucial North American region fell 24 percent, mainly due to investments in the ongoing productivity and reinvestment program. Sales in Latin American grew 4 percent, to a level surpassing Europe, where sales edged lower amid the ongoing recession. Sales in the Eurasia and Africa division jumped 9 percent, but mainly due to the company's acquisition of Saudi Arabia bottler Aujan. The company "once again delivered solid growth against the backdrop of a still uncertain global economy," said Coke chairman and chief executive Muhtar Kent in a statement. "Guided by our 2020 Vision, our roadmap for winning together with our global system bottling partners, we enter 2013 and the fourth year of our journey to 2020 focused and on track to reach our goals." The company also announced a major effort to better carve up territory with five major US bottlers for the company's beverages: Coca-Cola Bottling Co. Consolidated, Coca-Cola Bottling Company United, Inc., Swire Coca-Cola USA, Coca-Cola Bottling Company High Country and Corinth Coca-Cola Bottling Works, Inc. The effort "might include an outright territory sale, a territory swap, or a sub-bottling arrangement, under which the bottler would make ongoing payments in exchange for exclusive territory operating rights," Coke said. The effort is aimed at "allowing each bottler to better service local customers and provide more efficient execution."