Page 30 - Aruba Bank 24 JULY 2015

BUSINESS A25
Coca-Cola fetching higher prices with marketing, mini-cans
Bottles of Coca-Cola are on display at a Haverhill, Mass. supermarket. Coca-Cola reported
quarterly financial results on Wednesday, July 22, 2015.
CANDICE CHOI
Associated Press
NEW YORK (AP) — Coca-
Cola says people are shell-
ing out more money for its
drinks, thanks to a mix of re- pany, known for more than
invigorated marketing and
mini-cans and glass bottles
that tend to cost more.
To help boost weak sales
growth, the maker of Sprite,
Fanta and Powerade has
Microsoft books $8.4 billion write-down on phones in 4Q
RYAN NAKASHIMA
AP Business Writer
LOS ANGELES (AP) — Mi-
crosoft booked an $8.4
billion charge in the fourth
quarter, swallowing a bitter
pill by writing off the Nokia
phone business it bought
just over a year ago. It nar-
rowly beat analysts’ de-
pressed expectations for
a quarter that also saw a
steep decline in personal
computer sales even as it
prepares to launch its latest
operating system, Windows
10.
The Redmond, Washing-
ton-based software giant
posted a net loss of $3.20
billion, or 40 cents per
share, reversing a profit of
$4.61 billion, or 55 cents per Windows 10 on July 29, a
share, a year ago.
Adjusted to exclude the
charges, the company
posted a quarterly profit of
62 cents per share, beating
the average estimate of 15
analysts surveyed by Zacks
Investment Research of 31
cents per share.
been slashing costs, then
pouring some of that mon-
ey into increased market-
ing.
The Atlanta-based com-
a century’s worth of ads
such as “I’d Like To Buy The
World A Coke,” says the
stepped-up quality and
quantity of its advertising is marketing.
helping it command higher
The write-down was ex-
pected after CEO Satya
Nadella announced 7,800
job cuts two weeks ago.
The company will contin-
ue to make phones on a
smaller scale, paring down
its lower-cost offerings.
Nadella told analysts on
a conference call he’d
like Windows phones to
be more targeted at high-
endbusinesses and their
employees, much like its
Surface tablet, which saw
upbeat sales.
“We have a formula there
that I would like to apply
more broadly,” Nadella
said.
The difficult quarter comes
ahead of the launch of
free upgrade for users of
Windows 7 or 8 for the next
year. The company hopes
that better integrating its
store into the revamped
Start button and power-
ing more Internet searches
through Bing will compen-
sate for the temporary dip
Thursday 23 July 2015
ics, the company said ica, noted that moms in
overall advertising spend- particular like the smaller
(AP Photo/Elise Amendola) ing saw a double-digit per- sizes and that people are
centage increase during willing to pay “a little bit
prices for its drinks. the quarter. more money” for them.
In a conference call with In the U.S., a recent cam- In the past, Douglas noted
analysts Wednesday, Co- paign is the “Share A Coke” that the company mar-
ca-Cola CEO Muhtar Kent program, which puts pop- keted packages that were
said the company’s reve- ular names and words like too big and led to waste.
nue growth in North Amer- “Friend” and “Legend” on He said a variety of small-
ica during the second packages. Many custom- er sizes now account for
quarter would not have ers snap pictures of the roughly in the “low teens”
been achieved without cans and bottles, then post as a percent of sales vol-
the “infusion” of improved them on social media sites ume in North America.
like Facebook and Insta- Other food and bever-
Without providing specif- gram. The increased focus age companies have
on marketing comes as pushed up revenue with
Coca-Cola faces broader similar strategies. Earlier
challenges in the U.S., with this month, for instance,
beverage options prolifer- PepsiCo CEO Indra Nooyi
ating and people continu- said the company is using
ing to move away from tra- “creative revenue man-
ditional sodas. agement tactics, coupled
That has prompted the with innovation” to boost
company to focus on its financial performance.
extracting more money That could mean newer
per transaction by raising products that cost a bit
prices on traditional pack- more, like Mountain Dew
ages, as well as by push- Dewshine that come in a
ing offerings like mini-cans glass bottle.
that cost more. During the And in April, Starbucks said
quarter, the company said it boosted sales in the U.S.
the sales volume of mini- with the help of pricier
cans rose double-digits. drinks like the “Flat White”
Sandy Douglas, president espresso and Teavana
of Coca-Cola North Amer- “Shaken” ice teas.q
in Windows revenue. going into a transitional 22 percent, hurt by a de-
Microsoft plans for Windows year.” cline in PC shipments that
10 to be its last version of In the quarter through researchers at IDC pegged
Windows before transition- June, Windows revenue fell at 11.8 percent globally.q
ing the business to a fee-
for-service model down the
road, although how that
will work is unclear.
The company gave an out-
look for revenue of $20.7
billion to $21.3 billion for the
first fiscal quarter through
September that was below
the $22.6 billion expected
by analysts polled by Fact-
Set. Shares dipped $1.90,
or 4 percent, to $45.38 in
after-hours trading.
Daniel Ives, senior analyst
with FBR Capital Markets,
said the company is like-
ly under-promising in the
hope it can over-deliver,
but investors are cautious
about the launch of Win-
dows 10.
“The Street continues to
be wary of what Windows
10 can bring in terms of a
growth profile back to the
Microsoft story,” Ives said.
“It’s a transitional quarter