CocaCola Net Up On Account of Increased Sales

Coca-Cola Co. (NYSE:KO) on Tuesday reported an increase of 8.1 percent in the company’s net income on account of the increase in sales and also the increased prices of products in the North American markets.

The soft drink giant along with the impressive financial results also announced a share buyback program, where in the company will repurchase more than $3 billion worth of shares from the market by the end of the year. This is higher than the earlier announced plans to repurchase $2.5 billion worth shares from the market.

The third quarter results announced on Tuesday were higher than predictions by analyst. The stocks of the soft drink manufacturer rose by 0.7 percent on the New York Stock Exchange to touch $67.40 in premarket trading. The net profit increase was reported to be $2.22 billion or around 95 cents per share. This is higher than the 88 cents per share reported last year in the same quarter by Coca-Cola. The overall third quarter revenue jumped by 45 percent to around $12.25 billion.

The company saw an overall growth overseas, where there has been a steady growth since the beginning of the year. The North American markets however saw little change because of the high unemployment rate and a struggling economy.

The company had to resort to price increase to combat the rapidly increasing raw material and other prices. Around 2 percent increase was made in wholesale prices of its products and around 3 percent on the company’s sparkling beverages.

Similar to a drop reported by its rival, Pepsi Co in the sparkling beverages business, Coca-Cola also reported a fall of 1 percent, in contrast to a 5 percent decline reported by its competitor. The sales of Coca-Cola are projected to increase steadily further and the company is positioned to strengthen further. According to analyst estimates, Coca Cola is set to gain more than $30 million by the year 2015, after the company sells all its bottling plants to private operators.

Coco-Cola is clearly talking a lead over Pepsi in the domestic and international markets, putting more pressure on the world’s second largest beverage manufacturer.

The soft drinks manufacturer also reported on Tuesday that the foreign exchange rated that helped the company report a profit in the third quarter can lead to losses in the fourth quarter. The company’s major percentage of revenue comes from overseas sales, which could lead to a fall in earning if the value of dollar falls.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.