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Shares of The Coca-Cola Company (KO - Free Report) reached a 52-week high of $42.48 on Tuesday, Apr 16, 2013 on announcement of expanded distribution deals with five of its bottling companies. The closing price of the cola giant on Apr 16 was $42.37.

Share Price Drivers

In concurrence with its first quarter earnings release, Coca-Cola announced that it was granting new expanded U.S. territories to five of its bottling companies to distribute its beverages, under its new beverage partnership model. The five bottling companies include Coca-Cola Bottling Co. Consolidated , Coca-Cola Bottling Company United Inc., Swire Coca-Cola USA, Coca-Cola Bottling Company High Country and Corinth Coca-Cola Bottling Works Inc.

The new agreement with the bottlers is expected to improve the efficiency of the operating territories and overall profits in the U.S. by shifting to a more franchise based model. The addition of new territories will add some of the important and largest cities to the existing territories of the bottling partners. The present transaction is expected to close during 2014.

The company’s North American beverage business is seeing sluggish volumes of its sparkling beverages like Coke and Fanta for quite sometime. Changing consumer preferences, increasing health consciousness and rising obesity concerns are affecting demand of the carbonated beverages of Coca-Cola as well as other soft drink companies like PepsiCo, Inc. (PEP - Free Report) and Dr Pepper Snapple Group Inc. (DPS - Free Report) .

KO is trying to re-invigorate sales of its soft drinks by introducing new stevia (a non-nutritive sweetener) based products, innovative packaging and stronger merchandising solutions to cater to the ever-changing needs of its consumers.

The company also announced mixed first quarter results on the same day. Coca-Cola’s first quarter 2013 earnings of 46 cents per share beat the Zacks Consensus Estimate of 45 cents by a penny. Moreover, earnings grew 5% from the prior-year quarter as revenue decline was offset by significantly improved margins. Revenues declined 1% to $11.04 billion as benefit from volume growth was largely offset by currency headwinds, structural changes and two fewer selling days in the quarter.

Coca-Cola carries a Zacks Rank #3 (Hold).

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