Soft drinks giant Coca-Cola Co (NYSE:KO) has given a disappointing outlook for 2017 as its net income more than halved in the final quarter of 2016.
The US company said it expected its 2017 adjusted earnings to fall by 1%-4%, down from the US$1.91 per share recorded in 2016, hurt by higher costs for refranchising its bottling operations in North America.
The weaker forecast came as Coke reported that its net income dropped to US$550mln, or 13 US cents per share in the fourth quarter to December 31, down from US$1.24bn, or 28 US cents per share at the same stage a year earlier.
The 2016 final quarter included a US$919mln charge related to the refranchising of its bottling operations, and excluding the charge, Coke earned 37 US cents per share, in line with estimates.
The group’s net operating revenue fell about 6% to US$9.41bn, but beat estimates of US$9.13bn, helped by higher sales in North America, its biggest market.
Coke’s soda sales volumes fell 2% worldwide, but in North America they rose 1%.
The group has been offloading much of its bottling business to cope with falling demand for carbonated beverages in North America.
Chief Executive Muhtar Kent – who in December said he would step down and be replaced by COO James Quincey – said the company remains on track to complete the refranchising of company-owned bottling operations in the US.
Story by ProactiveInvestors