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Coca-Cola Sales Plunge As Drink Maker Sheds Bottling Biz

17 Feb, 2018 10:00 IST|Sakshi
Coca-Cola has been focusing on reinvigorating its globally known brands while branching out with small-batch and specialty drinks

Atlanta: Coca-Cola swung to a fourth-quarter loss after being hit with a USD 3.6 billion tax charge tied to a sweeping overhaul of the nations tax laws.

Revenue also plunged as the worlds 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 Friday. "We achieved or exceeded our full-year guidance while driving significant change as we continued to transform into a total beverage company," said CEO James Quincey. "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 USD 2.75 billion, or 65 cents per share.

Also read: Human waste found in Coca-Cola cans, probe launched

Earnings, adjusted for one-time 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 per cent to USD 7.51 billion, also topping Wall Street projections for revenue of USD 7.36 billion.

Wendy Nicholson, an analyst with Citi, said it was a "strong quarter and we like the improvement in organic sales growth, although results remain messy." Nicholson called the companys 4 percent organic growth target for this year "impressive." Beverage volume growth was flat overall, though the company did see gains in tea, coffee, water, and sports drinks.

Coca-Cola has been focusing on reinvigorating its globally known brands while branching out with small-batch and specialty drinks. It bought Mexican sparkling water brand Topo Chico last year and also introduced a line of mixers in Spain called Royal Bliss, which can be used in bars or at home.

"We are assertively shifting our culture," Quincey said. "Its 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 per cent in 2018, down from 24 per cent in 2017. That will be offset over the next decade by the USD 3.6 billion charge.

AP

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