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Coca-Cola reports 11% increase in Q2 net income

DBR Staff Writer Published 28 July 2016

Coca-Cola has reported an 11% increase in its net income to $3.46bn for the second quarter of 2016, compared to $3.11bn for the same period last year.

Net operating revenues declined 5% to $11.53bn in Q2, compared to $12.15bn in the year-ago period.

Revenue from North America increased 2% in the quarter, while revenue declined in all other regions.

Worldwide volume rose 1% year to date and the company gained global value share in nonalcoholic ready-to-drink beverages.

The company expects full-year 2016 organic revenues to increase 3%. Comparable currency neutral income before taxes is anticipated to grow 6% to 8% in 2016.

Coca-Cola chairman and CEO Muhtar Kent said: “Strong performance in some of our largest and most developed markets, including the United States, Mexico and Japan, was offset by difficult external conditions in many of our emerging and developing markets, including China and Argentina.

“These factors combined to put pressure on our volume and top-line performance in the quarter, especially where we own bottling businesses.”

Separately, Coca-Cola signed several agreements to continue its progress in reshaping its North American bottling system.

The company signed letters of intent with two US bottlers to expand distribution areas in two states.

The deals are part of a plan to refranchise all of Coca-Cola’s North American territories by the end of next year.

Coca-Cola has to-date reached definitive agreements or signed letters of intent to refranchise territories that account for about 65% of total U.S. bottler-delivered distribution volume.

The company has also reached definitive agreements or signed letters of intent for 43 of the 51 cold-fill production facilities in the US.

Image: Coca-Cola reports second quarter 2016 operating results. Photo: courtesy of THE COCA-COLA COMPANY.