The Coca-Cola Co (NYSE: KO) stock opened on a weak note this morning and fell over 2.4% on February 9th, 2017 (as of 10:03 AM EST; Source: Google finance).
The Coca-Cola has reported the adjusted earnings per share of 37 cents in the fourth quarter 2016 ended 31st December, which is in line with the analysts’ estimates for the adjusted earnings per share of 37 cents. The company had reported the fall of about 6 percent in the net operating revenue to US$9.41 billion, which is the seventh straight drop but beaten the analysts’ estimates of US$9.13 billion, due to the higher sales of its sodas in North America, its biggest market. The volume sales grew 1 percent in North America, including a 1 percent growth in sales of its carbonated sodas such as Sprite and Fanta. However, the global volume sales for the company fell 1 percent in the fourth quarter 2016, due to the high levels of inflation in certain Latin American countries. KO is offloading much of its bottling business to cope with falling demand for carbonated beverages in North America.
Moreover, the net income attributable to the company’s shareholders has more than halved to US$550 million in the fourth quarter 2016 from US$1.24 billion a year earlier. The fourth quarter has included a US$919 million charge related to the refranchising of its bottling operations. The company is on track to complete refranchising of its U.S. bottling operations by the end of this year.
Additionally, The Coca-Cola’s Fanta, Sprite, and Smartwater, is in the process of selling off its bottling businesses to independent companies that will bottle its sodas and other drinks. Instead of bottling, KO is focusing on marketing its brands and selling syrups and concentrates to the bottlers. The change means less revenue for Coca-Cola, but fewer costs.
For 2017, The Coca-Cola expects the adjusted earnings to fall 1percent to 4 percent from US$1.91 per share in 2016, which is below the analysts, who were on average expecting earnings of US$1.97.
KO’s No. 2 executive, James Quincey, is preparing to succeed CEO Muhtar Kent in May. Quincey is expected to oversee a critical period of transformation for Coke, that has also been cutting costs to satisfy the shareholders.
On the other hand, a customer from Fordsburg had bought a Coca-Cola king size and found insects inside the cooldrink. The shop and the cashier have confirmed that the drink had insects.
The Coca-Cola stock has fallen 0.99% in a year (source: Google Finance). According to tipranks.com, 9 analysts has covered the stock while recommending a “Hold”. KO has an average price target of $44, which is a further upside of 4.71%.