Coke takes Q4 hit after $3.6B tax charge
ATLANTA — Coca-Cola swung to a fourth-quarter loss after being hit with a $3.6 billion tax charge tied to a sweeping overhaul of the nation’s tax laws.
Revenue also plunged as the world’s largest drink maker sells off its bottling operations.
Industry analysts have anticipated both as the company reshapes operations, and shares edged higher in morning trading yesterday.
“We achieved or exceeded our full-year guidance while driving significant change as we continued to transform into a total beverage company,” CEO James Quincey said. “While there is still much work to do, I am encouraged by our momentum as we head into 2018.”
The Atlanta company reported a loss of $2.75 billion, or 65 cents per share. Earnings, adjusted for onetime gains and costs like the tax hit, came to 39 cents per share, which was a penny better than analysts had expected, according to a survey by Zacks Investment Research.
Revenue fell 20 percent to $7.51 billion, also topping Wall Street projections for revenue of $7.36 billion.
Beverage volume growth was flat overall, though the company did see gains in tea, coffee, water and sports drinks.
“We are assertively shifting our culture,” Quincey said. “It’s been a lot of change, and much of it is only just starting to show tangible results.”
Coca-Cola launched Coca-Cola Zero Sugar, a reformulated replacement for Coca-Cola Zero, in 20 markets last year, while also moving its Honest and Smartwater brands into more international markets. The company estimates that the tax overhaul will result in a global tax rate of 21 percent in 2018, down from 24 percent in 2017. That will be offset over the next decade by the $3.6 billion charge.