Coke Drops Most Since 2008 as Pressure Rises Amid Tough Outlook
(Bloomberg) -- Coca-Cola Co. plunged the most intraday in more than 10 years on Thursday after the company released a lackluster forecast for 2019 and highlighted upcoming obstacles such as currency pressures, geopolitical tensions and weakening consumer sentiment. Shares of rival soft-drink bottler PepsiCo Inc. also declined.
- Unit case volume fell 1 percent in North America and 2 percent in Latin America in the quarter ended Dec. 31, though adjusted earnings per share matched analyst forecasts. The company sees this year’s earnings essentially flat, forecasting a range of -1 percent to 1 percent growth.
- While the beverage giant has made progress with its Diet Coke and Coke Zero Sugar brands, the results show that a broader decline in soda consumption may still be weighing down performance. Coke, like its rivals in the beverage business, is also facing higher transportation costs.
- Chief Executive Officer James Quincey has been banking on a pivot away from sugary soda at the world’s largest beverage company. He’s now under pressure to show his company’s big bet on U.K. coffee chain Costa can drive growth.
- Coke, like Pepsi, has raised prices to offset higher costs -- moves the company said caused some consumer backlash in the quarter. In addition, it sold less juice, dairy and plant-based beverages. The drinks business has become more competitive in the U.S., with sparkling water, bottled coffee and other options gaining popularity.
- Coke shares declined as much as 7.9 percent to $45.87 -- the biggest drop since 2008. The stock had gained 5.2 percent this year through Wednesday’s close.
- For more on the results, click here.
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