Coca-Cola Co.'s strong sales overseas seen offsetting weak US growth in 2nd quarter

NEW YORK (AP) -- The Coca-Cola Co. reports earnings for the second quarter on Thursday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: The world's biggest beverage maker has enjoyed growing sales overseas, but like the rest of the soft drink industry, it faces falling demand for cola in the U.S., as well as higher prices for commodities such as aluminum and corn.

The company made a major management change during the quarter with Muhtar Kent, the company's ex-COO, taking over July 1 as chief executive of the Atlanta-based company. He replaced Neville Isdell, who will remain chairman until April 2009.

BY THE NUMBERS: Coca-Cola told investors in May that soft volumes in the U.S. will be offset by strong international sales, but offered no specific earnings guidance.

Analysts polled by Thomson Financial expect earnings per share of 96 cents on revenue of $8.93 billion, on average.

ANALYST TAKE: Morgan Stanley analyst Bill Pecoriello said that if its main bottler raises prices, Coca-Cola should consider raising concentrate prices by more than its usual 2 percent, to share in the benefit of any such raise.

"If Coca-Cola were to detail a plan to take higher concentrate pricing in '09 to help offset any extra volume weakness, investors would likely be relieved," he wrote in a research note.

WHAT'S AHEAD: Analysts wonder whether Coca-Cola may raise its concentrate prices to follow Coca-Cola Enterprises, a possibility first reported by the trade publication Beverage Digest. It said CCE could raise prices in September by a mid- to high-single digit percentage, a hike that could hurt overall sales volume.

Also, Coca-Cola will be a major advertiser for the 2008 Summer Olympics starting Aug. 8 in Beijing. Three new ads begin airing this week, one of which features athletes Yao Ming and LeBron James.

And the company plans to bring Vitaminwater to consumers outside the U.S. It bought Glaceau's Vitaminwater for $4.1 billion last June.

STOCK PERFORMANCE: During the quarter, Coca-Cola shares fell 15 percent to $51.98 on June 30. Over the past year, the share price was off slightly, down 0.6 percent, from June 2007 to June 2008.