Coca-Cola profits fall 21% after health scare

Click to follow
COCA-COLA, the world's largest soft-drinks company, yesterday unveiled a 21 per cent fall in second-quarter profits following the fallout from its health scare in Europe and slowing demand in Asia.

Net income at Coke dropped for the third straight quarter, to $942m (pounds 600m), or 38 cents a share, from $1.19bn a year earlier. Revenues rose by 4.4 per cent to $5.38bn. Three-fourths of Coke's profit and two-thirds of its sales come from overseas.

The company warned two weeks ago that its second-quarter profits would be reduced by sales bans and recalls in Europe, where about 250 consumers fell ill after drinking its products, and declining sales abroad. Case sales of its drinks in Europe dropped 6 per cent. Before the 30 June warning, Coca-Cola was expected to earn 41 cents a share.

Coke's shares have fallen by 27 per cent the past 12 months. However, they rose $2116 to $631516 last night after its chairman, Douglas Ivester, said business may pick up over the next year. Analysts still expect full- year earnings to fall to $1.37 from $1.40 in 1998.