ATLANTA — Currency headwinds continue to challenge The Coca-Cola Co., which reported lower revenues in the recent quarter on a strong U.S. dollar. For the third quarter ended Oct. 2, the company had net income of $1,449 million, equal to 33c per share on the common stock, down 31% from net income of $2,114 million, or 48c per share, for the prior-year period. Excluding items affecting comparability, including charges related to restructuring, refranchising, productivity and reinvestment, the company said its earnings per share rose to 51c.
Operating revenues declined 5% to $11,427 million from year-ago revenues of $11,976 million. Organic revenues increased 3%, driven by higher prices and volumes. Global sparkling beverage volumes grew 2%, driven by 8% growth in Coke Zero and low-single-digit growth in Sprite, Fanta and Coca-Cola that was offset by an 8% decline in Diet Coke. Global still beverage volumes rose 6%, led by 11% growth in packaged water, a 5% gain in sports drinks and 4% growth in ready-to-drink tea.
|James Quincey, president and c.o.o. of Coca-Cola|
“While the global economic environment remains challenging, as the slowdown in the Chinese economy and the lower oil prices are putting pressure on many commodity-dependent economies, such as Australia, Brazil, and Russia, while volatility rippling through the Middle East causes further economic uncertainty, despite these macroeconomic challenges, our five-point plan and our focus on execution and reinvestment drove improved results with both unit case volume and price mix growing 3% each in the quarter,” said James Quincey, president and chief operating officer of Coca-Cola, during an Oct. 21 earnings call.
The company’s five-point plan includes driving revenue and profit growth, making disciplined brand and growth investments, driving efficiency through aggressive productivity, streamlining and simplifying the organization and refocusing on the core business model.
“Our company has undergone a significant amount of streamlining and change these past 12 months,” said Muhtar Kent, chairman and chief executive officer. “And while we are encouraged by our progress, we know we need to do more.”For the full year, management expects structural items will be a 1% headwind on net revenues and currency will be a 7% headwind on net revenues and an 11% headwind on operating income. The company projects currency-neutral earnings per share growth of 5%, in line with previous expectations.