Coca-Cola, the world's biggest soft drinks company, warned yesterday that its earnings for the second half of the year would disappoint investors.
Coca-Colablamed weaker sales in the American market for its poor performance. The gloomy news put Coca-Cola in stark contrast to its rival, PepsiCo, which last week said its bottling business was up strongly on higher demand for the fizzy soft drink.
E Neville Isdell, who was recently appointed as Coca-Cola's chairman and chief executive in an attempt to turn the business round, said: "I am not satisfied with this. They are symptoms of problems that demand ... initiatives that will put this company firmly on its proper growth course."
Coca-Cola, which until recently did not provide earnings outlooks, forecast a profit of 46 cents to 48 cents per share for the third quarter and 88 cents to 92 cents per share for the second half. Despite the fact that Wall Street has come to expect downbeat signals from the company, the update drove its shares down in early trading by more than 5 per cent.
Analysts believe Coca-Cola has been hit by competition from discount retailers. The company, based in Atlanta, has also faced the higher costs of going back to selling more of its drink in glass bottles rather than plastic ones because of environmental regulations.
The company's largest bottling business, Coca-Cola Enterprises, also issued a profit warning last week. It came as Pepsi Bottling Group, the largest PepsiCo bottler, said its worldwide case volume was up 2 per cent in the third quarter.
Coca-Cola said that its northern European market has experienced a considerable drop in sales. It indicated that the decline in volumes in France was in double figures.Reuse content