The Coca-Cola Company (NYSE: KO) is expected to report stronger first-quarter profit as the world's largest soft-drink maker tries to offset higher commodity prices by undertaking a new cost-cutting program and continuing to target emerging market growth.

The Coca-Cola Company (NYSE: KO), which reports earnings Tuesday before the markets open, is likely to book a profit of 88 cents a share, up 2.3 percent from a year ago when Coca-Cola reported earnings of 86 cents per share, according to analysts polled by Thomson Reuters.

The consensus estimate remains unchanged over the past month, but it has moved down from three months ago when it was 92 cents.

It's a company and stock that has performed relatively well through last year, so investors will be interested in and concerned about whether some of that momentum will continue into this year, HSBC analyst Lauren Torres said.

Revenue is projected to come in at $10.82 billion for the first quarter, 2.9 percent above the year-earlier total of $10.52 billion.

For the year, analysts expect Coca-Cola to earn $4.05 a share on revenue of $48.13 billion.

The Atlanta-based company holds a long-term growth rates view of 3 percent to 4 percent volume growth, 5 percent to 6 percent revenue growth, 6 percent to 8 percent operating-income growth and high single digits earnings-per-share growth.

For 2012, we expect Coca-Cola to continue to meet or exceed its long-term growth objectives, Torres said. This should be supported by continued volume and pricing growth, as wells as the company's cost savings and productivity initiatives.

Coca-Cola's profits have been on the rise over its last three fiscal years from $5.8 billion in 2008 to over $11.8 billion in its last fiscal year.

Forty-three percent of stores in the world carry Coca-Cola products. Everyday Coca-Cola sells 1.7 billion servings of its beverages all over the world.

For Coca-Cola, our biggest competitor is really our past and our biggest challenge is really our present, Joseph V. Tripodi, executive vice president and chief marketing and commercial officer at Coca-Cola, said at a marketing meeting in New York.

Emerging Markets

Emerging markets are still growing well ahead of developed markets so far and there is little reason to think this will not continue to be the case, Goldman Sachs analyst Judy E. Hong wrote in a note to client.

Like many other companies, including chief rival PepsiCo Inc., Coca-Cola has also looked overseas for growth.

In its last fiscal year, Coke said its global volume grew 5 percent, helped by strength in emerging markets such as Africa, China, India and Latin America.

Fourth-quarter sales volume in North America gained 1 percent. In comparison, the Pacific region unit, which includes China and Japan, raised sales volume 5 percent. In the company's Eurasia and Africa group, volume climbed 4 percent while operating income jumped 16 percent. Sales volume in India rose 20 percent.

While any one time some countries might be dropping in demand, especially like high economic uncertainty in parts of Europe, other regions in the world provide opportunities for Coca-Cola because they compete in over 200 countries, said Thomas Mullarkey, an analyst at Morningstar Inc.

In 2011, more than 55 percent of Coca-Cola's net operating income and nearly 80 percent of its unit case volume were generated outside of North America.

We've heard good growth coming out of emerging markets, so a lot of us would assume that will continue in the first quarter, Torres said.

Coca-Cola opened its 42nd bottling plant in China on March 29 to meet demands arising from the country's increasing middle-class population and urbanization.

In August, the company announced it would invest an additional $4 billion in China in the next three years, starting in 2012. Coca-Cola said China -- the country with a population of more than 1.3 billion -- will become the biggest market for the company by 2020.

At the moment, the consumption for our products per capita in China is still lower than other places, Martin Jansen, CEO of Coca-Cola Bottling Investments Group China, told the China Daily. So if we can continue our growth momentum, actually before 2020, China will become the largest market of Coca-Cola globally.

Volume in China grew 10 percent in the fourth quarter, led by brand Coca-Cola, Sprite and Fanta all growing in double digits.

In China, volume is still growing pretty strong, Torres said. They [Coca-Cola] feel there is still a lot of room to build that market.

Annual per capita consumption of Coca-Cola products in China is only 34 servings, versus eight servings in 1998, and versus 394 servings in the U.S.

We see significant opportunities for consumption growth in developing and emerging regions, Standard & Poor's analyst Esther Kwon wrote in a note to clients.


Challenges over commodity costs and volatility in foreign exchange continue to mount.

The company expects to see $350 million to $450 million of commodity pressure in 2012, while also forecasting a low single-digit negative currencies impact on the first quarter operating income and a mid-single-digit negative impact on operating income for full-year 2012.

Coca-Cola announced a new cost-cutting plan aiming at reducing costs of $550 million to $650 million by 2015. This came after the company completed a $500 million four-year savings program in 2011.

Coca-Cola said savings from the program will be reinvested into marketing and help offset rising commodity costs.

We believe these savings, as well as the company's pricing initiatives should help offset a volatile commodity cost and FX rate environment in 2012, Torres said.

Despite higher costs for ingredients like juice and corn-based sweeteners, Coke has benefited in recent quarters by raising prices in North America. CEO Muhtar Kent said demand was strong for its flagship Coca-Cola soft drink, with volume sales gaining 1 percent in the region even as the company raised retail prices for carbonated beverages by 4 percent.

Fourth Quarter Recap

Coca-Cola delivered better-than-expected operating earnings of 79 cents per share in the fourth-quarter 2011, which exceeded analysts' estimate of 77 cents per share and prior-year earnings of 72 cents per share. The results were also ahead of the long-term targets of Coca-Cola.

Net revenues increased 5 percent to $11.0 billion. Currency, however, had a negative one percent impact on net revenue in the quarter.

Coca-Cola has topped earnings estimates in three of the last four quarters. On average, the earnings surprise was a positive 1.07 percent.

Stock Performance

Coca-Cola Company has increased dividends for 49 consecutive years.

In the first quarter of 2012, Coca-Cola increased its quarterly dividend from 47 cents per share to 51 cents a share to provide a total of $2.04 per share over the last four quarters and a 3 percent yield.

Coca-Cola's major competitor, PepsiCo, Inc. (NYSE: PEP), is set to report its first-quarter earnings results on April 26 before the market open.

Other competitors include: Dr. Pepper Snapple Group Inc. (NYSE: DPS), Monster Beverage Corp. (NASDAQ:  MNST), Coca-Cola Enterprises Inc. (NYSE: CCE), Unilever N.V. (NYSE: UN), and Kraft Foods Inc. (NYSE: KFT).

The Coca-Cola Company (NYSE: KO) is up 0.22 percent, to $71.94 a share, in Monday morning trading. Year to date, the stock price has gained 2.82 percent in value.