Coke profit falls on wet weather, weak economy1 min read . Updated: 16 Jul 2013, 08:30 PM IST
Chief executive Muhtar Kent says he believes the firm’s performance will improve in the second half of the year
Coca-Cola Co. reported weaker-than-expected sales volumes on Tuesday due to ongoing economic malaise and unusually poor weather, sending its shares down nearly 3%.
Coca-Cola said overall volume rose 1%, which was below its expectations, and cited slow economies in Europe, Asia and Latin America. It also said historically wet and cold weather across various regions curbed sales of soft drinks and overall consumer spending.
Coke chief executive Muhtar Kent said he believes the company’s performance will improve in the second half of the year.
Quarterly net income dipped to $2.68 billion, or 59 cents per share, from $2.79 billion, or 61 cents per share, a year earlier.
Excluding items, earnings were 63 cents per share, in line with the average analyst estimate, according to Thomson Reuters I/B/E/S.
Revenue dropped 3% to $12.75 billion.
By region, sales volume fell 1% in North America and 4% in Europe, but rose 2% in Latin America, 9% in Eurasia and Africa, and 2% in the Pacific region.
In China, volume was flat due in part to poor weather and an economic slowdown, which is expected to continue to hurt results throughout the year. Still, Coke expects growth to return in the second half as it “evolves" its strategy in China. It did not elaborate.
Rival PepsiCo Inc. agreed in late 2011 to sell its interest in 24 soft drink bottlers in China to Tingyi Holding Corp. after it had lost money amid soaring raw material costs and intense competition with Coke. At the time, Coke’s share of the Chinese market was more than triple that of PepsiCo.
Coca-Cola shares fell 2.8% to $39.86 in premarket trading from their close on Monday at $41.01 on the New York Stock Exchange. Through Monday, the shares are up 13% so far this year. Reuters