ATLANTA — The Coca-Cola Co. says it spent this past year in transition as it restructured key divisions and made changes to its management team. The result, the world's largest beverage maker said Tuesday, was better execution and higher sales, though profit fell in the fourth quarter.
Its results, excluding certain one-time items, beat Wall Street expectations, and its shares rose as several industry watchers gave the Atlanta-based company high marks for internal improvements.
"We are beginning to see early signs of an execution-focused turnaround that is working," analyst Mark Swartzberg of Stifel, Nicolaus & Company Inc. said in a research note to investors.
Coca-Cola said it earned $864 million, or 36 cents a share, for the three months ended Dec. 31, a 28 percent drop from the $1.20 billion, or 50 cents a share, it recorded in the same period a year ago, when the company benefited from an insurance settlement and other matters.
Coca-Cola said it earned $1.08 billion, or 46 cents a share, in the quarter when it excludes one-time items such as an accrual for taxes related to the repatriation of foreign earnings and charges incurred by an equity investee.
Analysts surveyed by Thomson Financial were expecting earnings of 45 cents a share.
Revenue in the three-month period rose 7 percent to $5.55 billion from $5.20 billion in the same period a year ago.
"This business is finally starting to believe that it can win again," Chief Executive Officer Neville Isdell told analysts in a conference call.
Total unit case volume increased 4 percent in the fourth quarter, led by gains in China, Russia, Brazil, Turkey, Germany and North America. But the company saw volume declines in the quarter in the Philippines, India and northwest Europe.
Isdell reiterated that employee morale has improved over the past year, which followed the departure of several top executives and the restructuring of certain key divisions at the company.
"We continue to see improvement in our execution across the globe," Isdell said. "Most importantly, it brings to an end our transition year."
Isdell said several new product launches and marketing initiatives in 2006 will help the company build on its growth plans. He dismissed suggestions there has been friction between Coke and some of its bottlers, saying the "noise level" on the issue is "incorrect."
For all of 2005, Coke said it earned $4.87 billion, or $2.04 a share, compared with $4.85 billion, or $2 a share, for all of 2004. Twelve-month revenue rose 6 percent to $23.10 billion from $21.74 billion recorded in 2004.
In addition to its flagship brand and its diet and flavored alternatives, Coca-Cola also markets numerous other soft-drink, water, juice, tea and coffee brands, including Sprite, Fanta, Mello Yello, Minute Maid and Dasani.
Coca-Cola said noncarbonated beverages increased from 17 percent of total unit-case volume in 2004 to 19 percent in 2005.
Coke shares rose 9 cents to close at $41.03 in trading Tuesday on the New York Stock Exchange.