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Boosted by improved sales in its key North American markets, Coca-Cola Co., reported a quarterly profit above Wall Street forecasts, but the world's number-one soft drink company still missed a key volume target.
Coca-Cola earned $1.12 billion in the second quarter of 2001, up from $926 million in the same period last year. Analysts on average had expected Coca-Cola to earn 43 cents a share in the period, according to research firm Thomson Financial/First Call, which tracks consensus data, according to Reuters.
But in the second quarter, Coca-Cola's unit case volumes, a key measure of financial health in the soft-drink industry, grew just over 3 percent, less than the 4 percent targeted by the company in an update last month.
Volumes rose 3 percent in North America, the company's largest market. Revenue fell to $5.29 billion from $5.49 billion in the year-earlier period. "Despite our growth in a tough economic climate, we are still not satisfied that we are reaching our full potential in some key markets," Coca-Cola CEO Douglas Daft said.
Improving Coke's position in North America, where sales had been growing by about 1 percent, has been one of the key challenges facing Daft since he took over the reins of the company about 18 months ago amid a restructuring of operations, the report said.
The restructuring, which culminated four months ago with the resignation of Jack Stahl, the company's second-highest ranking executive, has led some investors to question the company's basic direction.
Daft, however, said the company was on track to deliver the sustainable growth in volume, earnings and cash flow that it expected. Coca-Cola, however, added that it expected its equity income in the second half of this year to be 2 cents a share lower than previously expected due to a worse outlook for Coca-Cola Enterprises Inc., the main bottler of Coca-Cola soft drinks, the report said.
Coca-Cola owns about 40 percent of Coca-Cola Enterprises.