Solid Sales Boost Coke Earnings

Coca-Cola Co. said Thursday that growth in its key soft drink brands sparked an 11% jump in second-quarter profit, and an executive said a federal investigation of its business practices probably would not result in material changes in its financial reports.

The world’s largest beverage maker earned $1.36 billion, or 55 cents a share, in the April-June quarter, up from $1.22 billion, or 49 cents, in the second quarter of 2002.

Coke’s reported earnings were reduced by 2 cents a share for streamlining initiatives, including 1,000 previously disclosed job cuts in North America and other cuts in Germany.

Analysts surveyed by Thomson First Call had predicted second-quarter earnings of 54 cents a share before one-time items.

Revenue was $5.69 billion in the quarter, up 6% from $5.37 billion a year earlier.

Shares of Coke rose $1.85 to $44.76 on the New York Stock Exchange.

The earnings report comes as Coke tries to repair its image, which has been damaged by allegations raised by a former Coke manager in a lawsuit against the beverage concern.

Last week, it was revealed that federal prosecutors have begun a criminal investigation into issues raised by ex-Coke manager Matthew Whitley.

Addressing the investigation Thursday, President and Chief Operating Officer Steve Heyer said Coke was taking the issue seriously. But the company believes that its financial statements are accurate, he said, and would not be materially affected in the future.

“As we’ve investigated all of the allegations by Mr. Whitley, we have found nothing that would require restatements of our financial results,” Heyer said.

Heyer said growth was strong across most of Coke’s divisions, in part because of the takeoff of Vanilla Coke.

Growth was weakest in Asia at 4% because of the effects of the illness SARS and a product recall in Japan, he said.