Coca-Cola Slides After Forecasting Weak Organic Revenue Growth


Coca-Cola Co (NYSE: KO)

Coca-Cola reported fiscal 2018 fourth-quarter earnings that matched expectations of Wall Street analysts. However, the soft drinks giant said that comparable earnings for the current year would likely remain flat while organic sales growth would slow.

Fourth-quarter net revenues were impacted by headwinds of 13%, from the combined effect of currency setbacks and the refranchising of its bottling operations, the company said. Shares of Coca-Cola, which have rallied about 13% over the past 12 months, were down 3.6% to $48.00 as of 0820 GMT.

KO Earnings & Outlook

Net revenues, Coca-Cola said, fell 6% to $7.1 billion from $7.51 billion in the same period a year ago. Analysts surveyed by Refinitiv were expecting the company to report net revenues of $7.04 billion.

Sparkling soft drinks revenue jumped 2% during the full year, while plant-based drinks, juice, and dairy dropped 1%. Coca-Cola Zero Sugar posted double digit growth, while coffee and tea rose 1%. Sports drinks, water, and enhanced water grew 3%.

Fourth-quarter net income came to $870 million, or $0.20 per share, compared with a loss of $2.75 million, or $0.65 per share in the same three months last year. Excluding one-time items, the company earned $0.43 per share, matching Refinitiv expectations.

For fiscal 2019, the company views organic revenue growth of 4%, compared with 5% last year. Coca-Cola also expects 12% to 13% jump in currency-neutral revenues but noted that headwinds in currency markets will hit net revenues by 6%-7%. Comparable adjusted earnings are expected to be within 1% (upside or downside) of the $2.08 that the company posted in 2018.

Coca-Cola CEO Comments

“I am pleased with our strong organic revenue and earnings growth in 2018. Our results demonstrate progress in our transformation as a consumer-centric, total beverage company and the power of a more strategically aligned system,” said James Quincey, Chief Executive Officer of The Coca-Cola Company. “Coca-Cola has established a strong foundation to capitalize on long-term growth opportunities and drive sustained shareowner value.”

Coca-Cola Co. Profile

The Coca-Cola Co. engages in the manufacture, market, and sale of non-alcoholic beverages which include sparkling beverages and still beverages such as waters; enhanced waters; juices and juice drinks; ready-to-drink teas and coffees; and energy and sports drinks.

Its brands include Coca-Cola, Diet Coke, Coca-Cola Zero, Fanta, Sprite, Minute Maid, Georgia, Powerade, Del Valle, Schweppes, Aquarius, Minute Maid Pulpy, Dasani, Simply, Glaceau Vitaminwater, Bonaqua, Gold Peak, Fuze Tea, Glaceau Smartwater, and Ice Dew.

It operates through the following segments: Eurasia and Africa, Europe, Latin America, North America, Asia Pacific, Bottling Investments, and Corporate. The company was founded by Asa Griggs Candler in 1886 and is headquartered in Atlanta, GA. – CNN Money