Coca-Cola Registers 8.5% Decline in Profits, Attributes it to Weak Overseas Sales
Published By : 19 Feb 2014 | Published By : QYRESEARCH
Obesity is taking its toll, and consumers are making a notable change in the beverages they consume. These changes are reflecting on the sales of cola giant Coca-Cola, with the company recording an 8% slide in its fourth quarter profits. Analysts said that these lower figures could be a result of consumers being wary of consuming soda.
According to information provided by the company, its net income declined by 8.5%, reaching USD 1.71 billion in the quarter that ended on December 31, 2013. In the same period in the preceding year, Coca Cola recorded profits of USD 1.87 billion. The quarter also saw sales dropping by 3.6% to reach USD 11 billion, promoting the company’s CEO Muhtar Kent to assure stakeholders that the company would seek new methods to ‘restore momentum’.
The company said that the lower sales and profits were the result of growth cooling down in emerging markets, as well as the unfavorable impact of the volatile foreign exchange rates. The company expects that these factors will have an even greater impact in the coming year.
The company has now committed to cut back nearly USD 1 billion from its operation costs, and put these savings into a marketing campaign that promises to be more wide-spread and vigorous, and one that will reach customers directly. The company also added that it plans to buy back shares worth USD 2.5 billion or USD 3 billion, which is around the same as 2013.
Despite these promises, investors did not seem highly impressed and this was evident from the stock prices of the company that dropped down by 3.75% per share (USD 37.47 per share).