Coca-Cola beat Wall Street estimates, Canon is going to buy Sweden’s Axis and Molson and MillerCoors saw weaker holiday sales this year. These are the headlines dominating Tuesday’s business news.
Coca-Cola not fizzling out
It seems Coca-Cola isn’t dead yet in North America as consumers seek out healthier beverage options. The company reported a better-than-expected profit because North American sales increased for the first time in four quarters, a statistic that offset the effects of a stronger United States dollar on its foreign markets.
Despite the four percent price hike in Coca-Cola products, sales in North America rose two percent to $5.37 billion in the fourth quarter of 2014, which accounted for close to half of all its sales. This news prompted Coca-Cola shares to spike 3.2 percent to $42.56 during pre-market trading.
Analysts note that consumers remain committed to consume less soda, particularly diet soda over concerns of artificial sweetener. Business experts added that lower gasoline prices and an improved labor market have somewhat assuaged the situation at Coca-Cola headquarters because shoppers are willing to spend a little bit more on items they deemed were not worth it a few years ago.
In addition, Coca-Cola launched last month its My Coke Rewards loyalty program.
“My Coke Rewards has been celebrating our most passionate and loyal fans since 2006 – just for enjoying their favorite beverages. We’re taking that commitment to the next level with this new digital platform by offering experiences that are more personalized, more social, and more valuable than ever,” said Kim Gnatt, Global Group Director of Digital Marketing, in a statement. “With brand new marketing technology systems powering the loyalty platform, we are able to serve content direct to consumers based on their personal preferences and online behaviors. And by leveraging our partnerships, we’re able to create one-of-a-kind experiences that only The Coca-Cola Company can offer.”
Holiday sales weaken for MillerCoors
MillerCoors and one of its parent companies, Molson Coors Brewing Co., confirmed Tuesday that it suffered a decrease in sales and falling profits in the final quarter of last year. In the fourth quarter, MillerCoors posted a $218 million profit, down from $241 million a year earlier. Net sales of the Miller Coors brand tumbled to $1.71 billion from $1.8 billion.
This news contributed to the company’s 3.7 percent drop in shares throughout pre-market trading.
MillerCoors also announced CEO Tom Long would be retiring from the company effective Jun. 30. It has already sought out a successor.
“Under Tom’s leadership, the company consistently delivered profit growth, pricing growth and cost savings, while dramatically improving capabilities in key areas like innovation, chain sales, revenue management, learning and development, and beer knowledge and appreciation,” said MillerCoors Chairman Pete Coors in a statement.
Canon to buy Sweden’s Axis in $2.8 billion deal
In an attempt to remain relevant in a shrinking camera market – thanks to high-quality cameras inside today’s suite of smartphones – Canon offered Swedish network video surveillance firm Axis AB $2.83 billion. This would be the largest acquisition in Canon’s history.
Axis noted that its board of directors was in complete unanimity to accept the offer, and its top three shareholders, who have a 40 percent stake in the company, supported the deal.
“The acquisition is a good and important step for Canon and its investors because we have all been wondering where it will seek the next growth source. Its traditional turf is increasingly slowing,” said Mari Yada, a research analyst at Aizawa Securities, in an interview with the Wall Street Journal.
Upon approval of the purchase, Canon would become the largest brand in the video surveillance market, a sector that the corporation sees as only growing moving forward. The market is estimated to be worth approximately $15 billion at the end of last year.