Forecast places pressure on Coke

Beverage company sees this year’s earnings being essentially flat.

Coca-Cola Co. plunged the most intraday in more than 10 years Thursday after the company released a lackluster forecast for 2019 and highlighted upcoming obstacles such as currency pressures, geopolitical tensions and weakening consumer sentiment. Shares of rival soft-drink bottler PepsiCo Inc. also declined.

Unit case volume fell 1 percent in North America and 2 percent in Latin America in the quarter ended Dec. 31, though adjusted earnings per share matched analyst forecasts. The company sees this year’s earnings essentially flat, forecasting a range of -1 percent to 1 percent growth.

Key Insights

■ While the beverage giant has made progress with its Diet Coke and Coke Zero Sugar brands, the results show a broader decline in soda consumption may still be weighing down performance. Coke, like its rivals in the beverage business, is also facing higher transportation costs.

■ Chief Executive Officer James Quincey has been banking on a pivot away from sugary soda at the world’s largest beverage company. He’s now under pressure to show his company’s big bet on U.K. coffee chain Costa can drive growth.

■ Coke, like Pepsi, has raised prices to offset higher costs — moves the company said caused some consumer backlash in the quarter. In addition, it sold less juice, dairy and plant-based beverages. The drinks business has become more competitive in the U.S., with sparkling water, bottled coffee and other options gaining popularity.

Market Reaction

■ Coke shares declined as much as 7.9 percent to $45.87 — the biggest drop since 2008. The stock had gained 5.2 percent this year through Wednesday’s close.