Coca-Cola profit loses its fizz for investors
Results disappoint amid expectations of stronger turnaround
Coca-Cola Co posted first-quarter results that mostly met analysts’ expectations, but underwhelmed investors who had been optimistic that a stronger turnaround was taking hold.
Earnings were 45 cents (Dh1.6) a share, excluding some items, the Atlanta-based company said in a statement yesterday. Analysts estimated 44 cents, on average. Sales fell 4 per cent to $10.3 billion (Dh37.8 billion), matching analysts’ average projection.
The results show Coca-Cola’s strategy of cost cuts and price increases is paying off, just not fast enough for some investors’ liking. While Chief Executive Officer Muhtar Kent has made progress by revamping the company’s bottling system and starting a $3 billion dollar productivity programme, the maker of Diet Coke and Fanta is continuing to struggle with health-conscious consumers’ shift away from drinking soda.
Shares of Coca-Cola are up 8.5 per cent this year through Tuesday, beating the 2.8 per cent gain for the Standard & Poor’s 500 Index.
Coca-Cola is facing currency headwinds abroad and declining soda consumption at home. To combat those trends, the company has introduced smaller bottles and cans that cost more per ounce of liquid than traditional cans and bottles. The efforts have helped somewhat.