Coke Profits up 10%; Protests Held Outside Hotel

Activists Accuse Company of Labor Abuse Practices

Associated Press
April 20, 2006

ATLANTA - The Coca-Cola Co.'s nearly two-year restructuring to put legal problems in the past, improve employee morale and stabilize the world's largest beverage maker around a common vision is complete, Chief Executive Neville Isdell told shareholders Wednesday as the company reported a 10 percent increase in first-quarter profit on flat revenue.

"We're well on our way to becoming the company you expect us to be," Isdell said during the company's annual meeting at a hotel in Wilmington, Del.

While he was speaking, about 50 demonstrators, including college students, Teamsters and activists, protested outside.

Activist critics have accused the Atlanta-based company of labor abuses in Colombia and environmental abuses in India, despite the company's aggressive public relations campaign to counter the claims.

Isdell said he welcomed the discussion, but urged those who disagree with the company's practices to be civil.

"Not everyone in this room is going to agree with everyone's views," Isdell said.

But he said almost everyone wants the same thing.

"We want our economies to grow. We want living standards to increase. We want The Coca-Cola Co. to be the best employer everywhere in the world that it operates," he said.

He added, "We want healthy, active consumers. We want to protect our planet and preserve our resources. In the end, we truly want The Coca-Cola Co. to be regarded as a great business and recognized as a great corporate citizen."

The company's earnings narrowly beat Wall Street expectations.

Coke said it earned $1.11 billion, or 47 cents a share, for the three months ending March 31, compared to a profit of $1 billion, or 42 cents a share, for the same period a year ago.

Excluding one-time items, Coke said it earned $1.16 billion, or 49 cents a share, in the three-month period. That was ahead of the 48 cents a share analysts surveyed by Thomson Financial were expecting it to earn in the quarter.

Revenue in the January-March period was $5.23 billion versus $5.21 billion a year ago.

Coke said unit case volume increased 5 percent companywide in the quarter, led by strong growth in China, Russia and Turkey. The company said it also had a solid quarter in North America and Latin America. Offsetting these results were unit case volume declines in the Philippines, India and Africa.

The company said it saw growth in its carbonated beverage, water, sports drink and juice brands.

Outside the annual meeting in Delaware, one of the protesters, Michael Gould-Wartofsky, a 21-year-old Harvard student from New York City, said Coke needs to be more accountable to its consumers and investors.

Holding a pair of drumsticks and beating on a plastic barrel on a sling across his shoulder, he said he also wants the company to be more accountable to the schools where it does business.

Others used bullhorns to make noise.

Teamster member Peter Rovetto, 52, of Jonas, Pa., who said he worked as a merchandiser for Coke in New Jersey, said the company needs to treat its employees better.

"Workers are underpaid and overworked and often pressured into working overtime," he said.

Activists were offering a tapwater challenge to passers-by to demonstrate that Coke's Dasani bottled water product tastes no better than municipal tap water but is much more expensive.

At the meeting, which was broadcast on the Web, shareholders voted to re-elect all of the board members to another one-year term, except for billionaire investor Warren Buffett, who decided not to seek re-election after 17 years as a Coke director.

Also Wednesday, Coke reiterated that it has made changes to its operating structure to create a new, separate internal organization for its unconsolidated bottling investments.

Coca-Cola shares rose 39 cents to close at $41.69 on the New York Stock Exchange. They have traded in a 52-week range of $39.36 to $45.26.

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