Coca-Cola Co. (NYSE: KO) on Tuesday reported its fourth-quarter earning results, beating analysts’ estimates after the company increased the price of beverages and cut a $3 billion cost.
The beverage giant posted a profit of $1.24 billion, or 28 cents a share, compared to $770 million, or 17 cents a share a year earlier. Excluding some items, the earnings were 38 cents a share, beating analysts’ estimated of 37 cents on average.
Atlanta-based company had been struggling overseas in the recent years. Especially in emerging markets, for example, China’s economy is slowing; Russia and Brazil were in recession. The beverage company also didn’t do well in Europe and Japan, where consumer demand is slowing. The profit was also hit by the weak foreign currencies and strong dollar.
But the company offset the weakness by raising prices and cost cuts. The company accelerated its refranchising and expects to refranchise its North America bottling operations by the end of 2017, three years earlier than expected.The beverage giant also targets a $3 billion in cost cuts by 2019. The earning report also said that 7% growth in Coca-Cola Zero offset a 5% decline in Diet coke.
“The company is clearly working hard to realign their business model with the current reality that they’re facing,” said Vivien Azer, an analyst at Cowen & Co. “The volume environment still feels a bit lackluster to me.”
Coca-Cola shares rose 1.41% to $43.24 at 3:58 p.m. in New York. The shares had gain 1.8 percent last year.