Coke earnings lose their fizz

In an earnings report released today, Coca-Cola Co. (KO) revealed that its first quarter profit fell 10 percent. While this met analysts' expectations, it represents a drop in net income from $1.5 to $1.35 billion. The beverage maker blamed its falling earnings on write-downs and restructuring charges and noted that, if these expenses were excluded, its earnings were $1.51 billion. However, this explanation fails to account for a three percent drop in sales to $7.17 billion.

Facing recessionary drops in spending, Coca-Cola has focused on its core brands, namely Coke, Diet Coke and Sprite. It has also used the current crisis to expand overseas with an investment in Britain's Innocent Drinks and has tried to buy China's Huiyuan Juice Group. Unfortunately, the rising dollar, which helps with investment, isn't quite so helpful when it comes to selling sodas: a stronger dollar translates into higher prices and lowered profits.