OCTOBER 19, 2010, 4:17 P.M. ET.

Coca-Cola Profit Rises 8% on Volume Growth

By ANJALI CORDEIRO

Coca-Cola Co.'s fiscal third-quarter profit jumped 8.4%, as the soda maker continued to see an improvement in the difficult North American region, and as sales increased at a fast clip in overseas markets including Russia and Brazil.

The beverage giant also said it will buy back $2 billion in shares by the end of 2010, above its previous estimate for a buyback of "at least $1.5 billion." Coke's stock was up 33 cents at $60.33 as the broader market slumped.

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..Coca-Cola recently completed the acquisition of the North American operations of its biggest bottler, just months after rival PepsiCo Inc. finished buying its own two biggest bottlers. The companies are hoping to reinvigorate their North American soft-drink businesses, which have been hurt by tepid sales in recent years. Weak consumer spending put added pressure on the industry in the recession, but both companies have seen some improvement in the U.S. as they have invested in marketing and new product launches.

During a conference call with analysts and investors, Coca-Cola Chief Executive Muhtar Kent said U.S. consumer spending is still mixed but the company's investments are "paying off."

The new bottler deal will accelerate the company's ability "to build momentum" in North America, he said. PepsiCo reported a profit jump in its most recent quarter, also aided in part by improvements in its U.S. beverages business.

Coke said it is seeing an upturn in Japan, another difficult market. In China, volumes grew 12%. China has become a key market for the soda giant. China Tuesday raised interest rates, but Mr. Kent said in an interview that the increase will aid sustainable economic growth in China. "It's the right move at the right time and it's ensuring that [China's] growth is going to be sustainable," Mr. Kent said. Steady growth in that country will benefit Coke and keep it on track to meet its long-term targets, he said.

The company said currency exchange will have a slight positive impact on operating income for the full year, but could have a slightly negative effect in the fourth quarter. Multinationals like Coke do business across the world and so have to deal with currency fluctuations globally.

Coca-Cola reported a profit of $2.06 billion, or 88 cents a share, up from $1.9 billion, or 81 cents a share, a year earlier. Excluding restructuring and other impacts, earnings climbed to 92 cents from 82 cents as revenue increased 5% to $8.43 billion.

Volume rose 5% in the most recent quarter, up 6% internationally and 2% in North America.

Sparkling beverages, which include Coke's carbonated-drinks business, had world-wide volume growth of 3% in the quarter from last year, including 4% growth internationally.

In the company's still beverages segment, which includes Dasani water and sports-drink brand Powerade, volume rose 11% amid 13% growth abroad.

——Tess Stynes contributed to this article.
Write to Anjali Cordeiro at anjali.cordeiro@dowjones.com and Tess Stynes at tess.stynes@dowjones.com

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