* Fourth-quarter adj. EPS $0.46, in line with estimates
* Sales fall 4 pct to $11.04 bln vs est $11.31 bln
* Global sales volume rises 1 pct
* Shares fall as much as 4 pct
By Siddharth Cavale
Feb 18 Coca-Cola Co's quarterly global
sales volumes rose less than the company estimated and fell in
North America, but the company said it expects to restore sales
momentum in 2014.
Coca-Cola shares fell as much as 4.3 percent - their most in
seven months - making the stock the biggest drag on the Dow
Jones Industrials index on Tuesday.
Coca-Cola, like rival PepsiCo Inc, has been battling
declining soda sales in developed markets, especially the United
States, as people reach for healthier options.
Both have responded by focusing more on juices, teas, water
and other non-carbonated beverages and increasing marketing
Coca-Cola bought a 10 percent stake in Keurig coffee maker
Green Mountain Coffee Roasters Inc earlier this month,
and will help develop a cold-beverage dispenser that it hopes
will boost at-home consumption of fizzy drinks.
Coca-Cola said on Tuesday that global sales volumes rose 1
percent in the quarter and 2 percent for the full year. Volumes
in North America fell 1 percent in the quarter, while those in
Europe grew just 1 percent as consumer spending remained
Chief Executive Muhtar Kent said the company would restore
its sales momentum in 2014 by increasing investments in
advertising, adding that U.S. sales were expected to improve
slightly this year.
The company reported flat net revenue in North America in
the fourth quarter.
Coca-Cola led the U.S. carbonated soft drink market in 2012,
with a market share of about 42 percent, according to industry
newsletter Beverage Digest. Pepsi had a 28.1 percent share.
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"Overall, (Coca-Cola) had relatively soft top-line results,"
Wells Fargo analyst Bonnie Herzog wrote in a note.
However, RBC Capital Markets analyst Nik Modi was positive
on the company's full-year prospects.
Modi said he expects Coca-Cola sales volumes to improve as
the company pumps more money into marketing in the United States
Coca-Cola said it expected to save $1 billion annually
through productivity improvements by 2016 and redirect much of
this into increased advertising and marketing.
The company raised its savings target to $1 billion from
$600 million due to higher bottling cost savings.
Herzog said she expects the increased productivity savings
to re-accelerate earnings growth over the next several years.
Janney Capital Markets analyst Jonathan Feeney said he
expected growth in 2014 to be driven by reinvestments, pricing
actions and new products such as Coca-Cola Life, a drink
sweetened with sugar and stevia.
PepsiCo has also been cutting costs in the face of weak soda
sales in North America. The company said last week it would look
to save $1 billion annually through 2019 by closing plants and
Coca-Cola's quarterly revenue fell 3.6 percent to $11.04
billion, in part because of the loss in revenue from its
bottling operations it sold in Brazil and the Philippines last
Excluding the impact of foreign exchange rates and the
separation of the bottling operations, revenue rose 4 percent.
Coca-Cola said it expects unfavorable currency rates to have
a 10 percent impact on operating income in the first quarter and
7 percent in the full year.
Analysts on average had expected revenue of $11.31 billion
in the quarter, according to Thomson Reuters I/B/E/S.
The company's net income fell to $1.71 billion, or 38 cents
per share, in the fourth quarter ended Dec. 31, from $1.86
billion, or 41 cents per share, a year earlier.
Excluding items, the company earned 46 cents per share,
in-line with the average analyst estimate.
Operating income fell 4 percent in the quarter, hurt by
unfavorable foreign exchange rates and other items.
Coca-Cola shares, which rose 5.6 percent in the 12 months to
Friday's close, were down 3.8 percent at $37.43 in midday
trading. PepsiCo's shares have risen 8 percent in the past year.
Shares of both companies trade at about 17 times forward