US consumer giants raise profits

Consumer spending accounts for two thirds of the US economy

Four giant US food and consumer goods firms have reported better-than-expected profits for July to September, a period that includes the immediate aftermath of the terrorist attacks.

Internet auction site eBay reported strong third-quarter results, but warned there many be some slowdown because of the economic slowdown.

Coca-Cola, McDonalds, Colgate-Palmolive and tobacco company RJ Reynolds all reported profits at the top end of market expectations.

Coca-Cola reported profits of $1.07bn, or 43 cents a share, unchanged from the same period of 2000, beating analysts' expectations.

Coca-Cola, the world's biggest soft drinks firm, said unit case volumes, a key measure for the industry, rose by 4% overall, and 3% in North America, its biggest market.

McDonalds

Global fast-food restaurant chain McDonalds fared less well.

Profits fell $3m to $545.5m, although the company still outperformed forecasts.

The results come a day after McDonalds, the world's biggest restaurant chain, outlined plans to cut costs by streamlining its US operations and shedding up to 700 jobs.

Ring of confidence

Colgate-Palmolive, which makes toothpaste, soap and pet food, said net profits rose to $296.2m, from $275.3m in the same period last year.

"Colgate's business fundamentals are very healthy," chairman and chief executive officer Reuben Mark said.

"All indications are that we will finish 2001 in excellent fashion and we plan for another strong volume and earnings year in 2002 despite global economic conditions."

Unit volume at Colgate-Palmolive grew 5.5%.

Sales rose in all the household goods maker's major markets, including North America and Latin America, two regions which each account for 26% of sales.

Sales grew 8% in Latin America and 3.5% in North America.

In Europe, where Colgate-Palmolive makes 20% of its sales, the volume of products shifted rose by 4.0%.

Price hikes

Prices rises helped tobacco company RJ Reynolds to beat expectations by offsetting a drop in sales volumes and higher costs for anti-smoking litigation.

Third quarter profits rose 13% to $128m, or $1.31 a share, ahead of consensus estimates for $1.29.

For the full year, RJ Reynolds, expects operating profit to remain "consistent".

The firm held onto its market share, which averaged 23.37% in the three months to 31 August, unchanged from the same time last year.

The company's Camel and Winston brands both boasted a larger market share than a year before.

eBay profits

"Business is good, but it would have been better," said eBay Chief Financial Officer Rajiv Dutta, referring to the 11 September attacks.

eBay's stellar growth has continued despite a slowdown in retail sales.

For the third quarter, net profits rose to $18.8m from $15.2m a year-ago while revenues shot up to $194.4m from $113.4m.

"Trading on eBay dropped on September 11 and remained much lower for several days," said eBay Chief Executive Meg Whitman.

"But within two weeks we saw activity begin to follow more typical trading patterns."

eBay raised its revenue forecasts for the fourth quarter by about $5m, to a range of $200m to and $210m.