Cost Cuts And Price Hikes Boost Coca-Colas Q4 Profit

ATLANTA -- Coca-Cola Co. reported better-than-expected fourth-quarter profit, boosted by higher volume and pricing, cost cuts and lower commodity prices. The beverage giant's profit climbed to $1.24 billion, or 28¢ a share, during the quarter ended Dec. 31, from $770 million, or 17¢ a share, a year earlier. Revenue fell 8% to $10 billion as a strong dollar once again reduced the value of sales from outside the United States.

"Our fourth-quarter performance was a testament to the action we took as the company continued to deliver solid pricing and unit case volume growth, culminating in 4% organic revenue growth for the full year," said Coca-Cola chairman and chief executive Muhtar Kent. "Importantly, this top-line growth was led by our flagship market of North America, which delivered its strongest annual performance in three years."

Global volumes grew 3% in the fourth quarter, fueled by noncarbonated drinks including tea and bottled water. Still beverage volumes grew 6%, while soda volumes rose 2% worldwide.

Coca-Cola posted 3% volume growth in North America, helped by price increases in the U.S. and a shift toward smaller packages that cost more per ounce. Lower sugar and corn prices during the fourth quarter, two main ingredients used by soft-drink makers, lowered input costs.

The company also said that it is accelerating the pace of its refranchising to include 100% of its company-owned North American bottling territories by the end of 2017, three years ahead of its previous schedule. Coke has also signed a non-binding agreement to refranchise its bottling operations in China.

For the new year, Coca-Cola said it expects both revenue and per-share earnings to grow 4% to 6% excluding the impacts of special items and currency fluctuations.

The company said it plans to buy back $2 billion to $2.5 billion of shares in 2016.