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Coke quarterly profit falls 24%


By SCOTT LEITH
The Atlanta Journal-Constitution
Published on: 10/21/04

Coca-Cola's worldwide sales volume barely budged in the third quarter, while profits tumbled 24 percent.

With those results, new Chairman and Chief Executive E. Neville Isdell was left to reiterate what he's said before � that Coke needs improvement on many levels.

"Overall, I'm not pleased," said Isdell, who is still early in the process of trying to formulate a turnaround plan for Coca-Cola.

Coke's third quarter, which was dampened by poor results in North America and parts of Europe, closed with profits of $935 million, or 39 cents per share.

While that was a drop of 24 percent, Coke's earnings were shaved by 11 cents per share in one-time costs. Excluding those, Coke earned 50 cents per share, beating estimates of 47 cents.

Coke's sales revenue totaled $5.66 billion, down slightly compared with 2003.

Isdell, who took the helm in June, said he's looking at Coke's troubles on two main levels.

"First are opportunities that can be resolved immediately," he said Thursday in a conference call with analysts and investors. These include such moves as trying to boost demand for Coke's lackluster midcalorie cola, C2, by cutting prices.

Coke also faces tougher tasks, such as improving morale and "bench strength" in management. "These are what I call getting the basics right," Isdell said.

Sales volume growth, an important indicator of performance that measures the number of cases sold, is currently at the lowest rate of the decade.

Volume increased 1 percent worldwide, the same as in the second quarter. Coke's worst spots included Germany, where volume declined 16 percent because of deposit laws that have hurt sales.

In North America, volume slid 3 percent, chiefly because of soft retail traffic, poor weather and higher prices. The company said retail pricing increased 6 percent during the quarter, which spanned July through September.

Although there were poor results in some key markets, Isdell highlighted upsides in several places, notably Brazil, China and South Africa.

In those countries, sales of carbonated soft drinks grew 14 percent, he said. "These markets are proof-positive that we can, and do, grow [carbonated soft drinks] when we do the right things for the business," Isdell said.

While there has been softness in several markets, notably the U.S. soft drink business, Isdell said beverage sales continue to grow worldwide.

"We're in a great industry," he said. "There's not a problem. We just have to get the offerings right."

Isdell touched on many topics during Thursday's conference call, but he didn't deal with several critical issues, such as expectations for future growth.

He said many issues will be addressed Nov. 11, when Coke has scheduled a much-anticipated meeting with analysts and investors in New York.

"There are going to be no grand pronouncements, no rosy promises," he said. But there will be "tangible benchmarks" to measure Coke's progress.

Coke's third-quarter results, released after the stock market closed, may have been disappointing overall, but they came as little surprise, given that the company had already issued projections in September.

By beating estimates, Coke even earned a bit of credit.

"The profit growth seems to be better than expected," said analyst John Faucher, of J.P. Morgan.

One key, he said, is hearing about Isdell's bigger plans. "Everyone's still waiting for the Nov. 11 meeting."

Source: http://www.ajc.com/business/content/business/coke/1004/22coke.html

 


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District 1: Rex Templeton Jr., Democrat.
District 3: Jeff Chapman, Republican
District 4: Chris Oliver, Democrat
District 6: Doug Stoner, Democrat
District 8: Rusty Griffin, Republican
District 9: Enock Vixamar, Democrat
District 11: John Bullock, Republican
District 12: Joe R. Thomas, Republican
District 13: Howard H. Rainey, Democrat
District 18: Cecil Staton, Republican
District 19: Tommy Williams, Republican
District: 20: Ross Tolleson, Republican
District 22: Don Cheeks, Republican
District 23: J. B. Powell, Democrat
District 24: Chuck Pardue, Democrat
District 25: Johnny Grant, Republican
District 26: Dale Washburn, Republican
District 29: Bob Trammell, Democrat
District 31: Bill Heath, Republican
District 32: Judson Hill, Republican
District 33: Bill Sanders, Republican
District 34: Edith Marie Mullin, Republican
District 40: Dan Weber, Republican
District 41: Joe Burton, Republican
District 42: Kenneth Brett Quarterman, Republican
District  46: Becky Vaughn, Democrat
District 47: Ralph T. Hudgens, Republican
District 51: Bobby Adams, Democrat
District 52: Preston W. Smith, Republican
District 55: Jerry Wyatt, Republican
State House
District 1: Mike Snow, Democrat
District 4: Roger Williams, Republican
District 10: Ben Bridges, Republican
District 11: Barbara Massey Reece, Democrat
District 14: pending
District 15: Jeff Lewis, Republican
District 16: 1) Jonathan Ingram, Republican or 2) Bill Cummings, Democrat
District 18: Mark Butler, Republican
District 23: Jack Murphy, Republican
District 26: Ashley D. Bell, Democrat
District 28: Michael Hardin, Republican
District 33: Nick Chester, Republican
District 34: Rich Golick, Republican
District 36: Earl Ehrhart, Republican
District 37: pending
District 38: Steve "Thunder" Tumlin, Republican
District 39: Chris Bouchard, Republican
District: 43 G. W. Hall, Democrat
District: 48 pending
District 51: Tom Rice, Republican
District 52: Dr. George R. Graham, Democrat
District 60: pending
District 66: Sam Ring, Republican
District 67: Bill Hembree, Republican
District 69: Jeff Brown, Republican
District 74: pending
District 76: Kenneth J. Parmalee, Libertarian
District 80: J. Max Davis, Republican
District 81: Eric Ponder, Democrat
District 82: pending
District 85: pending
District 92: Raymond Davis, Republican
District 96: George Warren, Republican
District 97: Brooks Coleman, Republican
District 99: Mike Seigle, Republican (weak on immigration)
District 100: pending
District 101: Michael T. (Mike) Coan
District 102: Carl Bergman, Democrat.
District 104: John Heard, Republican
District 105: Donna Sheldon, Republican
District 109: pending
District 110: John Lunsford, Republican
District 111: pending
District 112: pending
District 115: pending
District 116: R. M. (Mickey) Channell
District 121: Davida Louise Johnson, Republican
District 123: pending
District 125: Curtis S. Jenkins, Democrat
District 126: David Knight, Republican
District 130: Nate Sanderson, Republican
District 134: pending
District 135: Jule Windham, Republican
District 136: Carol S. Bird, Republican
District 140: pending
District 141: Wilbur E. Baugh, Republican
District 142: Stephen Cabe, Republican
District 143: Louise Shackelford, Republican
District 147: Johnny W. Floyd, Republican
District 152: Ed Rynders, Republican
District 154: Jay Robers, Republican
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District 157: pending
District 165: Buddy DeLoach, Independent
District 166: Bert Oliver, Democrat OR Terry Barnard, Republican
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District 170: Penny Houston, Democrat
District 172: Gene Maddox, Republican
District 173: pending
District 174: Ellis Black, Democrat
District 176: John Page, Republican
District 177: Mark Hatfield, Republican
District 178: Hinson Mosley, Democrat

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