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The Coca-Cola Company (KOFree Coca-Cola Stock Report) got off to a slow start in 2014. Sales at the beverage giant declined 4% in the March quarter, while earnings also fell 4%, to $0.44 a share. Currency headwinds, particularly in Latin America, were a big drag, clipping 4% from revenues and reducing comparable operating income 10%.

Otherwise, the company produced generally solid results. Unit case volumes pushed ahead 2%, allowing the company to increase its share of the non-alcoholic ready-to-drink beverage market. As is usually the case, still beverages were a bright spot, with an 8% increase in volumes offsetting a 2% decline in sparkling drinks. Meanwhile, absent currency, operating income rose 4%, even while the company kicked off a campaign to increase spending on brand-building initiatives around the world. From a geographic basis, all regions except North America contributed to the gains in currency-neutral operating income. The weakness close to home reflected one less selling day in the quarter, the shift of the Easter holiday into the June quarter, and the timing of expenses.

As it stands, we now look for full-year earnings to reach $2.10 a share, down $0.15 from our estimate at the time of our January full-page report and essentially flat with the 2013 tally of $2.08. As was the case in the first quarter, currency headwinds stand to be a big hurdle to achieving positive year-over-year comparisons. In all, management expects that changes in exchange rates, especially the devaluation of Venezuela's bolivar, will likely reduce operating income by 7%.

After a weak start to 2014, KO shares rallied a bit on the release of first-quarter results. (The stock, though, is still in the red year-to-date, while modestly underperforming the major domestic equity benchmarks). Notably, earnings met the expectations of Wall Street, which had become more pessimistic about the company's 2014 prospects during the opening months of the year. Too, the slight uptick in volume growth (from 1% in the December quarter to 2% in the latest three-month period) was likely a welcome development, given the challenging market conditions facing carbonated beverage makers in many parts of the world. Still, these high quality shares offer good risk-adjusted total return potential, making them worthy of consideration by conservative investors with a long-term view.

About the Company:  The Coca-Cola Company is the world's leading marketer of ready-to-serve, nonalcoholic beverages. On any given day, 1.7 billion individual servings of the company's brands are consumed by people around the globe. The Atlanta-based company currently has more than 500 wholly owned and licensed brands, including 15 that generate $1 billion or more in annual sales.

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