Financial Roundup

25 July 2005

Global (calendar Q2)

  • Coca-Cola
       Second-quarter net income rose 8.8% to $1.72 billion (€1.42bn; £988m) on robust sales in emerging markets such as Brazil and China.
       Revenue climbed 6.7% to $6.31 billion. Q2 earnings included a gain of about four cents a share related to a legal settlement, tax gains and bottling investments.
       The rate of growth also suggested that Coke's aggressive new marketing strategy is resuscitating the beverage behemoth's flagship colas.
       But ceo Neville Isdell, who assumed the joint role of chairman/ceo a year ago, warned: "2005 is still a transition year. We still have considerable work ahead of us in the US, Germany, Philippines and particularly India."
       Morgan Stanley analyst Bill Pecoriello was similarly cautious, opining that although Isdell has managed to stabilize the company, "Coke remains a work in progress".

    Global (calendar Q2)
  • Google
       Despite second-quarter profit up more than fourfold and doubled revenues, Google's results failed to sate the greed of Wall Street. Its shares fell 5.7%, or $17.95, in after-hours trading to $295.99.
       "A combination of high expectations and cautionary comments about the future is putting pressure on the stock," observed David Edwards, an analyst at American Technology Research.
       Nonetheless, the internet search titan posted net income of $342.8 (€284m; £197m), up from $79.1m a year earlier. Revenue rose to $1.38 billion from $700.2m.

    Global (calendar Q2)
  • McDonald's
       Profit fell 10%, due partly to tax expenses, although revenue increased 8%, aided by some pricier new menu items.
       Net income fell to $530.4 million (€439m; £305m) from $590.7m a year earlier.
       The latest numbers include an incremental tax expense of $112 million resulting from a move to repatriate approximately $3.2 billion in foreign earnings under the Homeland Investment Act.
       Revenues at the chain's 13,600-plus US restaurants rose 7% for the quarter, driven partly by new products, such as fruit-and-walnut salads.
       Outside the US, sales and customer visits to the company's struggling European restaurants increased partly because of heavily promoted premium products and core menu items.
        Desperation appears to be driving sales activity in the key UK market, where discount coupon books are being delivered to 23 million households.
       In Asia, generally weak performance in China and Japan was offset by strong sales in Australia.

    Data sourced from Wall Street Journal Online; additional content by WARC staff