Coke tries to reassure shareholders

Beverage firm pledges to improve image abroad

? Coca-Cola Co. vowed Tuesday to change the perception of people who still believe it permits abusive practices abroad, a tough sell to some shareholders who bombarded the world’s biggest beverage company with questions about human rights and water depletion.

Tuesday’s annual meeting in Wilmington, Del., was chief executive Neville Isdell’s first since taking over the Atlanta-based company’s top post.

Shareholders didn’t want to talk about re-electing the board of directors or appointing an independent auditor. Instead, they questioned Isdell about issues he’s heard before, namely the killings of several union workers at Coke bottling plants in Colombia and accusations that some of Coke’s plants in India have depleted local groundwater.

Isdell said Coke had not done anything wrong in the two countries, noting that government inquiries in Colombia had dismissed the accusations that Coke was complicit in the deaths by failing to protect workers there. He also said a high court in India had sided with Coke about the water dispute. Even so, Isdell conceded that the company’s best efforts to put the questions to rest have not been successful. Last year’s annual meeting also descended into questions about alleged abuses abroad.

Company reports increase in sales but decrease in profits

Coca-Cola Co. reported an 11 percent drop in first-quarter profit despite a solid increase in sales that were boosted by aggressive advertising and growth in several international markets.

The results, announced before the market opened Tuesday, beat Wall Street expectations.

For the three months ending March 31, the Atlanta-based company said it earned $1 billion, or 42 cents a share, compared to a profit of $1.13 billion, or 46 cents a share, for the same period a year ago.

University of Michigan student Ryan Bates protests against Coca-Cola Co. at the company's annual shareholders meeting Tuesday in Wilmington, Del. Coke reported a decrease in its first-quarter profit, but shareholders had other things on their mind as they challenged the world's largest beverage maker with questions about human rights abuses and water depletion.

Excluding one-time items, Coke said it earned $1.12 billion, or 47 cents a share. On that basis, analysts surveyed by Thomson First Call were expecting earnings of 43 cents a share.

Revenue in the January-March period rose 4 percent to $5.27 billion, compared to $5.1 billion recorded a year ago.

Worldwide unit case volume increased 3 percent in the quarter. In Coke’s key North America division, unit case volume was even compared to a year ago. In Japan, unit case volume increased 2 percent in the quarter, while in China unit case volume grew 21 percent. In Latin America, Coke’s unit case volume increased 6 percent in the quarter.

The improvement in certain markets followed Coke’s decision to increase advertising to try to counter sluggish results in recent quarters.