Soft drink giant Coca-Cola (KO - Free Analyst Report) posted good results for the September quarter. Share net increased 9%, year over year, to $0.88, on 5% higher overall revenue of nearly $8.43 billion. Unit-case volume was up 5% globally, led by gains in such key markets as Russia (+30%), Brazil (+13%), and China (+12%). Even North America, the company's most-mature market, managed to eke out some growth (+2%). On the other hand, Europe was as flat as a day-old soda, as gains in The United Kingdom and Germany were offset by declines in the more economically challenged southern geographies.

The company's portfolio of still (non-bubbly) beverages, led by Dasani bottled water and Powerade sports drink, experienced an 11% increase in unit-volume sales during the quarter. Meanwhile, sparkling beverages, including trademark Coca-Cola, rose 3% globally.

Management is still targeting sustainable bottom-line growth in the 7%-9% range. And we think that the company has a good shot at reaching, if not modestly exceeding, that goal. Annual per capita consumption of Coke products is still very low in countries like China and India (at around 20 individual servings, versus 600-plus in Mexico). As standards of living increase, more people from Mumbai to Shanghai will, no doubt, reach for a Coke. In North America, meanwhile, the company stands to benefit from the recent acquisition of Coca-Cola Enterprises' (CCE) bottling assets.

The Atlanta-based company does face its share of challenges going forward, including stiff competition, changing consumer tastes, and criticism from health groups about the empty calories of soda. Still, we think Coke will continue to generate solid earnings and investment returns over the pull to 2013-2015.

About The Company: The Coca-Cola Company is the world’s largest beverage company. On any given day, 1.6 billion individual servings of the company’s brands are consumed by people around the globe. Coke, Diet Coke, Sprite, Fanta, Dasani, and Powerade are just some of the marketer’s most popular beverages. Business outside North America accounts for about 75% of net sales.

* This report includes late-breaking news not reflected in our full-page review of this company.


At the time of this article’s writing, the author did not have positions in any of the companies mentioned.