Coke profit up despite sales decrease
Sales of the Coke brand ticked upward, but Diet Coke continued its slide in the second quarter.
The Coca-Cola Co. posted a 19% increase in net income in the second quarter despite a 3% drop in global revenue as soda sales remain tepid and currency rates hurt the company.
The drink maker's global operating revenues slipped to $12.2 billion, as sales fell 13% in Latin America, 10% in the Eurasia and Africa division, 9% in Europe and 7% in Asia. A big reason for those drops was unfavorable currency exchange rates.
A 3% uptick in sales in North America, however, which makes up nearly half of the company's sales, helped offset those declines. North America was also the only region for Coca-Cola to post an increase in operating income, rising 7% to $887 million.
"Our second-quarter results were in line with our expectations and mark continued progress toward restoring momentum in our global business," Coca-Cola CEO Muhtar Kent said in a statement. "We are executing against our strategic initiatives and remain focused on driving efficiencies through productivity and making disciplined investment decisions to accelerate growth."
Overall sales of bottled drink units rose 2% for the quarter, while sales of concentrate products rose 3%.
Amid stiff competition for consumers in the bottled drinks business, global sales of the Coca-Cola brand rose 1% in the second quarter. Coke Zero was up 1%, and Sprite rose 3%.
But Diet Coke's slide continued, falling 7% for the quarter as consumers conscious of their calories sought out alternatives.
A bright spot for the drink maker was 7% growth in ready-to-drink tea and 8% growth in packaged water, though juice sales fell 1%.
The company took advantage of its profitable quarter by using cash flow to pay down $320 million in long-term debt.
Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.