Coca-Cola profit rises sharply

(Reuters) - Coca-Cola Co (KO.N: Quote, Profile, Research), the world's largest maker of soft drinks, reported higher-than-expected quarterly profit on Wednesday, helped by higher sales, acquisitions and foreign exchange rates.

Coca-Cola said fourth-quarter net income was $1.21 billion, or 52 cents per share, compared with $678 million, or 29 cents per share, a year ago.

Excluding charges, Coke earned 58 cents per share, topping analysts' average estimate of 55 cents, according to Reuters Estimates.

Net operating revenue rose to $7.33 billion from $5.93 billion a year ago, helped by a 6 percent increase in sales of drink concentrate, the company's main business.

Currency exchange rates boosted revenue 8 percentage points, since the weak dollar versus foreign currencies increases the value of international sales when they are converted to U.S. dollars for inclusion on the company's income statement.

Unit case volume rose 5 percent in the quarter, supported by acquisitions.

Coke, which owns about 35 percent of its bottler Coca-Cola Enterprises Inc (CCE.N: Quote, Profile, Research), saw its year-ago profit impacted by an asset write-down the bottler took related to its North American franchise license.

 

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U.S. Stocks Advance for Third Day, Led by Tech, Energy Shares

 (Bloomberg) -- U.S. stocks rose for a third day, the longest stretch of gains in 2008, after increased demand at Applied Materials Inc. spurred a technology rally and energy shares climbed on higher gas-station sales.

Applied Materials, the largest maker of semiconductor- production equipment, advanced the most in four years on a surge in orders for machines that make flat screens. Exxon Mobil Corp. and ConocoPhillips led oil companies higher after the Commerce Department said rising prices at filling stations helped boost retail sales last month. Genentech Inc., the biggest U.S. maker of anti-cancer drugs, rallied the most in a month after its Avastin treatment helped slow the spread of breast tumors.

``The rally could last,'' said Eric Green, who helps manage $5 billion as senior managing partner at Penn Capital Management in Cherry Hill, New Jersey. ``We see the market heading higher.''

The Standard & Poor's 500 Index added 8.71 points, or 0.7 percent, to 1,357.57 at 11:31 a.m. in New York. The Dow Jones Industrial Average gained 89.98, or 0.7 percent, to 12,463.39. The Nasdaq Composite Index increased 31.57, or 1.4 percent, to 2,351.51. About five stocks rose for every two that fell on the New York Stock Exchange. European and Asian benchmarks dropped.

Applied Materials' report of increasing demand spurred speculation that technology companies' earnings will withstand an economic slowdown sparked by the collapse of the subprime mortgage market. The S&P 500 Information Technology Index has lost 14 percent this year, the worst performance among 10 industries.

Applied Materials

Applied Materials rose $1.26, or 7 percent, to $19.33. The company said orders for machines that make flat screens will rise as much as 5 percent this quarter, exceeding some analysts' estimates.

A gauge of computer-chip makers gained 1.8 percent, the second most among 24 industries in the S&P 500, led by Applied Materials, its third-biggest member.

Exxon, the largest U.S. crude producer, climbed $1.16 to $85.54. ConocoPhillips, the third-biggest, rallied 98 cents to $77.38. Energy companies in the S&P 500 climbed 1.4 percent even as oil for March delivery fell 44 cents to $92.34 a barrel in New York.

Filling station sales rose 2 percent in January after remaining unchanged the prior month, the Commerce Department said, as regular gasoline rose as high as $3.11 a gallon in early January. Total retail sales climbed 0.3 percent, compared with economists' forecast for a drop of 0.3 percent. Excluding gas, purchases rose 0.1 percent last month, the Commerce Department said.

Retailers in the S&P 500 fell 0.2 percent as a group after the report.

Genentech Rallies

Genentech added $1.46 to $71.38. The results were from a trial called Avado, which included patients who took Avastin with docetaxel chemotherapy.

Industrial companies also rose, led by Rockwell Automation Inc., the world's largest maker of factory controls, after the report on purchases by consumers bolstered confidence in the sagging economy. Rockwell increased $2.02, or 3.6 percent, to $57.60.

Deere & Co., the world's largest maker of farm tractors and combines, fell 97 cents, or 1.1 percent, to $85.51. Deere's comments that the U.S. housing slump will maintain ``continued pressure'' on sales of construction and forestry equipment overshadowed its increased annual forecast and first-quarter earnings surge.

A survey of Bloomberg users showed benchmarks for the world's biggest stock markets probably will fall for the next six months as economic growth slows, and investors are the most pessimistic in the U.S. and the U.K.

 

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Adcock boss suspended

(Fin24) - Consumer goods giant Tiger Brands says it will be extending its independent investigation into collusion allegations in its healthcaredivision into all its businesses.

"We will extend this investigation into every single business that we areinvolved in," Tiger Brands' non-executivechairperson Lex van Vught said ina statement.

"We are determined to find and root out any anti-competitive
or collusive practices," he said.

Also, the managing executive of Adcock Ingram Critical Care, Arthur Barnett,has been suspended by the board pending the conclusion of the independentinvestigation.

Van Vught said the company was "devastated" at the allegations.
 

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Rand regroups, gains nearly 1%

(Fin24) - The rand currency strengthened nearly one percent against the dollar and bonds also firmed, regrouping after a sharp fall over the past two weeks, as emerging market sentiment improved and stocks recovered further.

The local currency was trading at R7.71 to the dollar at 17:44 GMT, 0.9% stronger than its previous close in New York, after see-sawing between R7.6775 and R7.82 during the session.

Government bonds tracked the rand's move in relatively light trade, pulling back some of their sizable losses sparked by investor concern over an expected easing in economic growth.

Dealers said trade was largely flow-driven with dollar buying out of London early in the day paring gains before it drifted back on higher stocks and broader emerging market gains as those flows waned.

"Emerging markets are stronger, the dollar is weaker against the euro and local stocks are up on the Dow (Jones index) and we are just picking up that on the currency," ABN AMRO trader Paul Peter said.

"The slight correction today is on the back of the euro, the
JSE."
 

 

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Conservationists battle coal firm

(Fin24) - A legal battle is brewing between conservationists and coal exploration company DMC Coal Mining over its plans to prospect for anthracite and torbanite in one of South Africa's most important regions for rare and endangered birds.

DMC Coal Mining has obtained prospecting rights to two properties in the Wakkerstroom region in south-eastern Mpumalanga and is also attempting to get prospecting rights over a further two properties.

This region had been previously examined by another coal exploration group - Keaton Energy - which decided not to apply for prospecting rights because of the sensitivity of the area.

DMC Coal Mining's plans are now being opposed by a number of environmental organisations including Birdlife South Africa, the Wildlife and Environment Society of South Africa, WWF-SA, the Endangered Wildlife Trust and the Ekangala Grassland Trust.

Reason is the region's importance as grassland and wetland habitat hosting a number of rare and endangered birds including Wattled Crane, Rudd's Lark, Botha's Lark and Blue Crane.
 

 

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AIG Credit-Default Swap Losses Won't Be `Material'

(Bloomberg) -- American International Group Inc., the world's largest insurer by assets, said ``over time'' it may recoup losses in assets that declined by $4.88 billion in value in October and November.

Any losses by the unit that issues so-called credit-default swaps won't be material to AIG, the firm said today in a statement. AIG rebounded in New York trading after falling the most in two decades yesterday on disclosure that writedowns from the contracts, sold to protect fixed-income investors, were four times bigger than a previous estimate.

Chief Executive Officer Martin Sullivan, who manages units that originate, insure and invest in subprime mortgages or securities, assured investors in December that writedowns tied to the U.S. housing market were ``manageable.'' The company, based in New York, has said it doesn't expect to sell mortgage- related investments at a loss when markets are weak.

While AIG ``may have illustrated questionable judgment'' in its accounting lapse, it ``does not necessarily increase the probability of real economic impairment'' on assets held to maturity, said Mark Lane, analyst at William Blair & Co. in Chicago, today in a research note. He rates the company ``outperform.''

AIG advanced $1.45, or 3.2 percent, to $46.19 at 12:48 p.m. in New York Stock Exchange composite trading. The company has lost about 33 percent in the past 12 months, trailing the 5.7 percent decline of the Standard & Poor's 500 Index.

`Solid Upside'

``For patient investors willing to ride out near-term volatility, we see solid upside in the stock,'' said Morgan Stanley analyst Nigel Dally in a note to investors today. He rates the company ``overweight.''

The insurer's financial products unit issues contracts that promise to reimburse investors for losses tied to $505.5 billion of securities as of Nov. 25, including corporate debt, European mortgages and collateralized debt obligations, which bundle together loans.

AIG's independent auditor PricewaterhouseCoopers LLP found a ``material weakness'' in the company's accounting for the contracts, AIG said yesterday, and the insurer didn't know what they were worth at the end of 2007.

 

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U.S. Stocks Rise After Buffett Offers to Help Bond Insurers

(Bloomberg) -- U.S. stocks rose for a second day, led by financial shares, on expectations Warren Buffett, the world's No. 1 investor, will help calm credit markets by offering to shore up bond insurers' finances.

Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, climbed after Buffett said he's willing to take on $800 billion in municipal bond obligations in an interview with CNBC. Monsanto Co., the world's biggest seed producer, advanced for a third day on an increased profit forecast.

The Standard & Poor's 500 Index added 13.99 points, or 1 percent, to 1,353.12 at 12:29 p.m. in New York. The Dow Jones Industrial Average advanced 162.99, or 1.3 percent, to 12,403. The Nasdaq Composite Index climbed 15.24, or 0.7 percent, to 2,335.3. More than three stocks rose for every one that fell on the New York Stock Exchange. Shares in Europe and Asia also gained.

``It's another potential solution to some of the credit problems,'' Mark Bronzo, who helps manage $11 billion at Security Global Investors in Irvington, New York, said of Buffett's offer. ``That's why the markets are responding well.''

Concern that bond insurers don't have enough money to pay claims on the $2.4 trillion in assets they guarantee has contributed to a 7.4 percent drop in S&P 500 financial shares in 2008. MBIA Inc., the largest bond insurer, lost 80 percent of its value in the last year before today, and smaller rival Ambac Financial Group Inc. slumped 88 percent, on concern that the companies will lose their AAA credit ratings.

Buffett's Offer

Citigroup added 73 cents to $26.54. Bank of America rallied 66 cents to $42.80. JPMorgan climbed 46 cents to $43.81. Bear Stearns Cos., the fifth-biggest U.S. securities firm, increased 49 cents to $80.25.

Buffett said he offered to take on the municipal-bond liabilities of MBIA, Ambac Financial and FGIC Corp. Buffett's Berkshire Hathaway Inc. would provide so-called reinsurance for the debt, he said in an interview with CNBC television.

One company turned down the offer and the two others haven't responded, Buffett, chairman of Berkshire Hathaway Inc., told CNBC.

MBIA slipped 79 cents to $12.79. Ambac lost 29 cents to $10.19. Buffett's offer doesn't include the insurers' subprime- related obligations.

'Project Lifeline'

Financial shares also climbed on plans to help delinquent homeowners avoid foreclosure. Bank of America, Citigroup and four other U.S. lenders announced a plan to offer a 30-day freeze on home foreclosures while loan modifications are considered. Treasury Secretary Henry Paulson and U.S. Housing and Urban Development Secretary Alphonso Jackson said today at a news conference in Washington that ``Project Lifeline'' would help stabilize communities disrupted by mortgage defaults.

Monsanto rallied $3.27, or 2.9 percent, to $117.30 after raising its 2008 profit forecast on higher demand for weed killer and genetically modified corn and soybeans. Profit in the year ending Aug. 31 will increase to $2.70 to $2.80 a share, 20 cents above the range of a Jan. 3 forecast.

Schlumberger Ltd. advanced $2.57 to $83.06 after Bear Stearns raised its recommendation on the world's largest oilfield-services provider to ``outperform'' from ``peer perform,'' saying the company's offshore drilling and exploration make it ``well positioned for the next phase of the oilfield service business cycle.''

Schering-Plough

Schering-Plough Corp. gained $1.16 to $21.78. The maker of Vytorin and Zetia cholesterol pills reported fourth-quarter profit, excluding some items, of 52 cents a share, beating the 27-cent average estimate of 17 analysts surveyed by Bloomberg.

General Motors Corp., the world's largest automaker, gained after reporting an adjusted fourth-quarter profit, not counting costs and gains the company considers one-time items, of 8 cents a share. On that basis, analysts estimated a loss of 64 cents. GM's net loss in the quarter was $722 million.

The Russell 2000 Index, a benchmark for companies with a median market value of $589 million, gained 9.80, or 1.4 percent, to 709.55, led by GMH Communities Trust. The provider of housing to students and the military surged the most since its initial public offering in 2004 after agreeing to be bought in two transactions for a total of $787 million. GMH added $3.13, or 56 percent, to $8.72.

NxStage Medical Inc. fell the most since its 2005 initial public offering, dropping $3.30, or 26 percent, to $9.45. The maker of portable dialysis systems said it expects a loss of as much as $1.52 a share in 2008, wider than the $1.06 loss estimated by analysts in a Bloomberg survey.

World Wrestling Entertainment

World Wrestling Entertainment Inc. climbed $1.16, or 7.6 percent, to $16.47. The producer of television's ``WWE Friday Night SmackDown'' reported fourth-quarter revenue and profit that was higher than the average analyst estimate as video sales and ticket prices increased.

 

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