The Coca-Cola Co., the world's largest beverage maker, reported an 11 percent drop in first-quarter profit despite a solid increase in sales.
The results, announced before the market opened Tuesday, beat Wall Street expectations.
For the three months ending March 31, the Atlanta-based company said it earned $1 billion, or 42 cents a share, compared to a profit of $1.13 billion, or 46 cents a share, for the same period a year ago.
Excluding one-time items, Coke said it earned $1.12 billion, or 47 cents a share. On that basis, analysts surveyed by Thomson First Call were expecting earnings of 43 cents a share.
Revenue in the January-March period rose 4 percent to $5.27 billion, compared to $5.1 billion recorded a year ago.
Worldwide unit case volume increased 3 percent in the quarter. In Coke's key North America division, unit case volume was even compared to a year ago. There was a 1 percent decline in unit case volume in the quarter in Coke's Europe, Eurasia and Middle East division, sparked in part by a 12 percent decline in Germany. In Japan, unit case volume increased 2 percent in the quarter, while in China unit case volume grew 21 percent. In Latin America, Coke's unit case volume increased 6 percent in the quarter.
"These results reflect our stated intent to step up our investments in marketing, innovation and organizational capability building while effectively managing our portfolio of countries," chief executive Neville Isdell said. "We are taking the actions necessary to position the company for future growth."
The one-time items affecting Coke's results stem from an accrual for taxes related to the repatriation of foreign earnings, a charge related to stock-based compensation, a favorable tax resolution and a gain on the issuance of stock by an equity investee.
The company was to hold its annual meeting of shareholders later Tuesday in Wilmington, Del.
The earnings report followed Coke's announcement Monday that the Justice Department has abruptly ended without taking action its nearly two-year-old criminal investigation of allegations raised in a whistleblower lawsuit of accounting irregularities at the beverage maker.
Separately, the company said it has reached a settlement with the Securities and Exchange Commission over its business practices in Japan.
The dual investigations were sparked by a 2003 lawsuit filed by former Coke manager Matthew Whitley, who claimed he was fired in retaliation for reporting to senior management allegations of fraud and accounting mistakes.
