Soft drink maker Cott Corp. said Monday the impact of foreign exchange dragged revenue lower in the second quarter even as the company booked a profit for the second time in 2009.
The Toronto-based company said it earned net income of $33.7-million (U.S.) or 48 cents per share for the quarter ended June 27.
The profits marked a reversal from the loss of $1.8-million or three cents per share booked during the corresponding quarter of 2008 and the second straight profitable quarter for the company, which had previously racked up a string of six successive quarterly losses before the 2009 fiscal year.
The company said revenue declined 5.9 per cent due to the impact of foreign exchange, falling to $438.8-million from year-earlier levels of $466.5-million. Excluding foreign exchange items, Cott said revenue would have increased 2.3 per cent.
The company also reported a sharp increase in operating income, which surged to $34.3-million from $5.3-million recorded a year ago.
Cott said global beverage case volume fell 2.5 per cent during the quarter, led by a 32.5-per-cent plunge in volumes in its Mexican division. Cott said its own actions to stabilize the company in the area were exacerbated by the H1N1 flu virus.
Case volumes were flat in North America and down 2.5 per cent in the U.K.
"We are pleased with our second-quarter results, which were driven by the steady improvement of our North American operations and a stronger volume performance in our U.K. business," Cott chief executive Jerry Fowden said in a statement, adding the company is still braced for tough economic conditions in the rest of 2009.
"While our performance in the first half of 2009 has been encouraging, we are mindful of challenges that may still lie ahead, such as heavy summer promotions from the national brands, higher commodity costs compared to the first half of 2009, and a changing competitive landscape."
Cott recently restructured under pressure from activist shareholder Crescendo Partners and has been returning to its core business of making store-brand soda pop, rather than developing new products such as energy drinks.
The company has been cutting jobs and streamlining operations in an effort to reduce annual operating costs by up to $43-million.
Cott announced in January that it was losing its exclusive deal with Wal-Mart to be the supplier of store-brand pop to the world's biggest retailer.
The company said at the time that it would wind down the exclusivity deal over three years, and that it represented nearly 40 per cent of its overall business.