Coca-Cola tanks after earnings fail to wow Wall Street

Posted Jul 17th 2008 11:31AM by Jonathan Berr
Filed under: Earnings Reports, Coca-Cola (KO), Coca-Cola Enterprises (CCE)

The Coca Cola Co. (NYSE: KO), which has been battling declining sales of carbonated beverages, is not finding many friends on Wall Street after reporting its second quarter results.

As expected, they were weak. Net income fell 23% to $1.42 billion, or 61 cents per share, compared with $1.85 billion, or 80 cents, a year earlier, the Atlanta-based company said in its earnings press release. Excluding a non-cash impairment charge resulting from the write down of North American assets of Coca-Cola Enterprises Inc.
(NYSE:CCE), profit would have been $1.01. Revenue rose 17% to $9.05 billion.

The results beat the 96-cent profit and $8.83 billion revenue of analysts surveyed by Bloomberg News and yet the stock is trading down because of concerns about the North American business of the world's largest beverage company. Though net revenue in the business is up about 10% so far this year, unit case volume is flat. Results in other parts of the world were much better.

"Our results were once again led by our international operations, which delivered 5 percent unit case volume growth, and we maintained volume in North America despite significant challenges," said Chief Executive Muhtar Kent in the earnings release.

Wall Street is clearly not impressed. Shares of Coca-Cola had their biggest slump today in almost four years. Coca-Cola is doing what it can to reduce costs, targeting $400 million to $500 million in annualized savings from productivity initiatives. Whether it will be enough to appease stockholders, such as Warren Buffett, remains to be seen.

Tags: CCE, coca-cola, coca-cola enterprises, Coca-colaEnterprises, featured, KO

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Reader Comments (Page 1 of 1)

7-17-2008 @ 1:37PM

Joe and Amy said...

High Fructose Corn Syrup is EVIL!! Put the SUGAR back in the formula and maybe people might drink it again. The 1984 change to HFCS from REAL SUGAR made this product EVIL!! People who care about the ingredients in foods stopped buying ALL high fructose corn syrup products(sodas included). Other countries won't ALLOW the coke formula to replace the sugar with the CHEMICAL GOOP high fructose corn syrup because they say it isn't SAFE!!! Coke needs to wake up, NATURAL products DO NOT HAVE HFCS in them, EVER (unless it's deceptive advertising-PREGO sauce!!) HFCS damages the liver and decreases your metabolism which makes you FATTER even though you may not have INCREASED your calories!! Then you become obese, then diabetes sets in..now you are screwed! It isn't that we are ALL eating more foood, it's the slower metabolism due to the HFCS! Yes some are eating more, but a lot of people are eating LESS and still getting fatter!!

7-17-2008 @ 8:21PM

barry said...

All in all, it was really a fascinating earnings call. I actually found that Seeking Alpha posted the earnings call transcript in its entirety. If any one is interested, it can be found here:

http://snipurl.com/30e8u