Coca-Cola profit rises despite hurdles

NEW YORK — The Coca-Cola Co. said Tuesday that its profit rose in the fourth quarter as it benefited from growth in emerging markets and a shift in the calendar that resulted in two extra selling days for the period.

But sales volume fell in China and Europe, reflecting a pullback in consumer spending.

In North America, its biggest market by revenue, volume rose just 1 percent, boosted by its Powerade sports drinks and bottled teas. The Atlanta-based company sold 2 percent less soda.

In a conference call with analysts, Chief Executive Officer Muhtar Kent said he expects 2013 will “once again be a year of challenges” but that the company nevertheless expects to hit its long-term target of 6 percent to 8 percent growth in operating income.

In the U.S., he said Coca-Cola is starting to see signs of improvement in consumer sentiment but that it is still waiting to see the effect of higher payroll taxes and gasoline prices. In China and Europe, the company said it expects volume to start rebounding in coming quarters.

“Our view is that this is not the start of a trend,” said Gary Fayard, the company’s chief financial officer, noting that quarterly declines occasionally happen.

Coca-Cola, which also makes Fanta, Minute Maid and Dasani water, is increasingly looking for growth in countries where its drinks aren’t yet as ubiquitous as they are in developed nations. In North America, the company also is relying on a shifting mix of beverages to increase sales amid intensifying criticism of sugary sodas.

The company is also facing tougher competition from PepsiCo Inc., which has significantly stepped up its marketing with major deals including a multi-year contract to sponsor the Super Bowl halftime show. Kent declined to comment when asked whether that push was having any effect but he said that Coca-Cola’s share of the soda market grew despite a broader industry decline.

“To be frank, we see competition as healthy. It keeps us on our toes,” Kent said.

For the quarter, Coca-Cola said global sales volume rose 3 percent, helped by gains in countries such as Turkey and Russia.

In Europe, the company blamed an uncertain economy, bad weather and price competition for a 5 percent decline in volume.

In China, where U.S. companies of all stripes are looking for growth, volume declined 4 percent after growing 10 percent in the year-ago quarter. The company said the business in the region was affected by a slowing economy, bad weather and a later Chinese New Year.