Coca Cola Sales Up, Faces Pressure From Commodity and Dollar Markets

October 21 00:00 2011

New York, Oct 21, 2011 (RainbowNewsLine.com) – Coca Cola, the global soft drink giant, has reported an increase in its net profit at 8.1%. This figure has been lower than some of the earlier profits posted by Coca Cola. However, it has reaffirmed the company’s image as one of the most stable horses on Wall Street. At a time, when the entire economy is taken over by frenzy and profits are falling, Coke’s profits are in line with what was expected.

The Atlanta, Georgia based company continued to outperform rival PepsiCo in all states in the United States. Coke has also done very well in the emerging markets. Earlier this quarter, Coke had announced plans to set up huge capacity in China citing expected spurt in demand. Coke’s logic is showing through in its result as sales from China are rising. China is already the second largest market for Coke.

The next quarter may however be a little dangerous for Coke. It faces the challenge of rising commodity prices. Thus, Coke may see its ingredients getting more expensive, raising the costs. At the same time, the weakening dollar poses a threat to the global giant too. It may earn more and more Yuan’s or Rupees but what’s the point if the dollar amount remains the same due to the falling value of the dollar.

 

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