Coca-Cola Delivers Strong Growth In Q1 Hong Kong Firm Is Arizonas New Coke Distributor

ATLANTA -- The Coca-Cola Co. announced better-than-expected first-quarter results; the period benefited for six additional days. Organic revenues grew by 8% on the back of strategic pricing, as well as higher concentrate sales.

First-quarter 2015 adjusted earnings of the beverage giant were 48¢ per share, which beat consensus estimates of around 43¢ by 12%. Earnings improved 9% year over year despite a strong dollar eroding the value of its overseas sales. Excluding the 6% impact of currency, earnings increased 15% driven by improved organic revenues and strong margins.

Despite currency headwinds, net revenue improved 1% year over year to $10.71. Currency headwinds hurt sales by 6%, in line with management's expectations. With more than half of its revenues coming from outside the U.S., the company's sales/profits are being affected due to the recent weakening of many emerging market currencies against the U.S. dollar.

Structural changes combined with the new provisions in Venezuela hurt revenues by 2%, also in line with expectations.

Adjusting for the impact of currency and structural changes, organic revenues increased 8%. Six additional selling days in the quarter, strong pricing gains globally and better volume trends in some key markets, like Europe and China, led the strong top-line performance in the reported quarter.

Adjusted consolidated gross margins improved 70 basis points (bps) year over year and 90 bps sequentially to 61.6% due to improved revenues. Adjusted selling, general and administrative (SG&A) expenses increased 9% on a currency-neutral basis to $4.09 billion due to higher marketing expenses.

Adjusted operating income on a constant currency basis increased 10% to $2.51 billion. Adjusted operating margin was 23.4%, up 20 bps year over year and 200 bps sequentially as improved organic revenues and strong cost management offset higher marketing investments.

Profit-before-tax grew 7% to $2.73 billion. Currency and structural changes hurt profit-before tax by 8% and 3%, respectively, both in line with expectations.

Swire Comes To Arizona

In other news, A Hong Kong-based company will now supply all the Coca-Cola products throughout Arizona. Swire Coca-Cola USA signed a letter of intent with the Coca-Cola Co. to distribute Coke products in the Phoenix and Tucson markets last week. Terms of the deal were not disclosed and it is expected to close in 2016. | SEE STORY

Swire Beverages has exclusive manufacturing and distribution rights for Coca-Cola products in Hong Kong, Taiwan, seven provinces in China and other markets in 13 western U.S. states. Swire is growing its reach in the U.S. In 2014 the company was granted the Denver and Colorado Springs markets by Coca-Cola.