Coca-Cola Co has announced their second quarter results, reporting that profit fell in the second quarter. The company’s net income fell to $2.60 billion, or 58 cents per share, from $2.68 billion, or 59 cents per share, in the same quarter a year earlier. Excluding some one-time expenses and other items, Coke earned 64 cents per share.
The company’s quarterly revenue was also lower than expected. Revenue fell to $12.57 billion, a decrease of 1 percent. This was lower than analysts’ estimates of earnings of 63 cents per share on revenue of $12.83 billion. Some analysts were disappointed in the results, noting that North American margins were not up as much as anticipated and global volumes slightly missed expectations.
Coca-Cola is the world’s largest soda maker and North America is its biggest market, accounting for nearly 45 percent of total revenue in the second quarter. Analysts had expected North American volume to increase by 1 percent to 2 percent. However, sales volume in North America was flat partly due to a decline in diet Coke sales. The sales volume of regular Coke increased by 1 percent.
Executives at the company believe that there are multiple factors that are weighing down Diet Coke sales. As consumers become more health conscious in developed markets, soda sales decline. Many consumers are also making the switch to natural sweeteners amongst consumer skepticism about the safety and quality of artificial sweeteners. Some also believe that the marketing for diet Coke has been insufficient and a larger effort is needed to promote the product.
There were some bright spots in the report. Global sales volume increased 3 percent in the second quarter. Much of the increase was attributed to the growth in sales of sparkling beverages. In the North American market, the company’s still beverage volume, which includes flavored water, juices and juice drinks, increased by 1 percent. Demand for smaller packages of the products has been strong as health conscious consumers limit their consumption. It was also reported that the decrease in diet Coke sales had improved from the first quarter of the year.