Coca-Cola profit misses on expenses, earthquake

Coca-Cola Co's quarterly profit missed Wall Street estimates by a penny, hurt by the Japan earthquake and the timing of marketing expenses, and its shares fell 1.7 percent in premarket trading.

Coke, the world's largest soft-drink company, said on Tuesday that net income rose to $1.9 billion, or 82 cents per share, in the first quarter, from $1.61 billion, or 69 cents per share, a year earlier.

Earnings per share were reduced by 1 cent because of lost revenue in Japan following the earthquake in March and 1 cent from the timing of marketing expenses as the company conforms its newly acquired bottling business to its accounting schedule.

Excluding those items, and restructuring and other charges, earnings were 86 cents per share, missing the average analyst estimate by a penny, according to Thomson Reuters I/B/E/S.

A Coca-Cola spokesman said the company did not warn investors about the impact from the timing of expenses.

Net operating revenue rose 40 percent to $10.52 billion, in part because of last year's acquisition of North American bottling operations. Analysts on average were expecting $10.57 billion, according to Thomson Reuters I/B/E/S.

Worldwide volume rose 6 percent in the quarter, with North American volume, excluding new cross-licensed brands like Dr Pepper, up 2 percent.

The Atlanta-based company, which does most of its business overseas, said sales volume rose 7 percent in Latin America, 1 percent in Europe, 8 percent in Eurasia and Africa and 5 percent in the Pacific region.

Coke bought its North American bottling operations in October to streamline its distribution system and cut costs. PepsiCo Inc, which bought its bottlers earlier in the year, will report quarterly results on Thursday.

Coca-Cola said it expects currency exchange rates to boost full-year operating income by a low- to mid-single-digit percent rate.

Through Monday, Coke shares gained 10 percent since mid-March, when a beverage industry newsletter reported that Diet Coke overtook Pepsi-Cola as the No. 2 soda in the United States last year behind Coca-Cola.

Still, weak consumer spending, rising oil and commodity inflation have weighed on soft drink makers.

Credit Suisse analyst Carlos Laboy said in a research note on Monday that Coke shares were trading at 15.8 times his 2012 earnings estimates, a 30 percent discount to their 10-year average multiple.

Coca Cola shares were down $1.14 at $66.60 in premarket trading.