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Coke Drops Most Since 2008 as Pressure Rises Amid Tough Outlook

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Craig Giammona

BloombergFebruary 14, 2019, 9:56 AM EST



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.

Key Insights 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.

Market Reaction

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.

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