NEW YORK - International sales again added fizz to Coca-Cola's fourth quarter, while sales in North America softened, to lift profit 55 percent in the last three months of the year.
Although the economy appears to be slowly improving, the CEO of the world's largest beverage maker said Tuesday he expects 2010 to be another difficult year.
CEO Muhtar Kent said people are no longer worried about how deep the recession will be, but sales could still be volatile in the next year as they wait to see job prospects improve.
"Compared to this time last year, there's a lot more clarity in terms of what the consumer is seeing. Not all good, but there's a lot more clarity," he told reporters on a conference call.
The maker of Sprite and Simply juices, based in Atlanta, sold 5 percent more beverages worldwide in its fourth quarter - with unit case volume up sharply in emerging markets like China and India, and solid growth in Latin America, where economies are growing rapidly.
The only region to report a case volume decline was North America, which had a 1 percent drop-off - a sign that those consumers are still wary about their spending.
But the reluctance of North American shoppers keeps having less of an effect the more Coca-Cola expands its international sales, which now make up more than three-quarters of total revenue. During the quarter, growth in China, India, Mexico and Brazil was equivalent to adding another Germany, the company's sixth-largest market, Kent told investors.
People don't buy as many soft drinks in those countries as they do in more developed parts of the world, so the company is investing billions of dollars along with its bottlers there to be ready for an increase, Kent said.
"These investments are what drives our business," he said.
Shares rose $1.36, or 2.6 percent, to close at $54.01 Tuesday.
Expect Coca-Cola to keep marketing its beverages to people have extra money to spend and aspire to drink Coca-Cola, said Edward Jones analyst Jack Russo.
"We take it for granted here," he said. "And it's not something you take for granted in these markets."
Unit case volume in China jumped 29 percent in the quarter, with India's figure rising 20 percent. Developing markets like Brazil saw an 8 percent gain, while developed markets such as France posted a 12 percent increase in unit case volume.
Coca-Cola's fourth-quarter net income rose to $1.54 billion, or 66 cents per share, in line with the expectations of analysts polled by Thomson Reuters. These estimates typically remove one-time items.
Revenue for the three months ended Dec. 31 increased 5 percent to $7.51 billion from $7.13 billion, beating Wall Street's $7.21 billion estimate. The company said its results were affected by six fewer selling days in the period.
The beverage maker credited its "Open Happiness" ad campaign and strong holiday programs with boosting its namesake brand's unit case volume 4 percent in the quarter.
The still beverage category - which includes juices and teas - saw its unit case volume climb 9 percent, 14 percent internationally and flat in North America.
Full-year profit increased 17 percent to $6.82 billion, or $2.93 per share, compared with $5.81 billion, or $2.49 per share, in the prior year.
Revenue for the year dipped slightly to $31 billion from $31.94 billion.
The company said it has hedges and other efforts in place to minimize the effects of the fluctuating U.S. dollar, which has been gaining strength.
A strong U.S. dollar shrinks international sales once they are translated back to U.S. dollars. Kent said foreign currency translation hurt the company in fiscal 2009, but he expects a small boost to the business in the current year.