Coca-Cola Co., which is currently the biggest beverage company in the world, announced that its profit for the fourth quarter decreased by 8.4%. The company also revealed that it is considering to start using a new cost-cutting program in order to increase its earnings.
The Coca-Cola Co. made an official statement today, saying that its net income decreased from 1.87 billion dollars, or 41 cents a share in 2012 to 1.71 billion dollars, or 38 cents a share in the fourth quarter that ended in December 2013. The company revealed that excluding some items, its profit amounted to 46 cents a share, which matched the median forecast of 16 analysts surveyed by Bloomberg.
Muhtar Kent, who is the Chief Executive Officer of the company, realizes that Coca-Cola is now experiencing slowing growth in emerging markets. He explained that the company plans to lower its supply and data-management costs and improve its marketing programs in order to generate 1 billion dollars in savings by 2016. The volume of the companys global sales increased by 2% for the year and by 1% for the quarter, trailing the 4% annual and the 3% quarterly growth posted a year ago. The company also revealed that it is planing a buyback of 2.5 to 3 billion dollars in shares by the end of 2014.
Mr. Kent said for the Wall Street Journal: “We are committed to accelerating marketing investments in our brands, further advancing our innovation strategies and maximizing productivity and reinvestment for growth.”
Before the results were released, one of the analysts, who work for JP Morgan Chase & Co. – Mr. John Faucher said in a note, which was cited by Bloomberg: “Coke’s problems are more macro than executional, although continued carbonated soft drink weakness is also having an impact.” Mr. Faucher has a neutral rating on the shares.
The Coca-Cola Co. settled 0.72% higher in New York on Friday at $38.93, marking a one-year change of +4.04%. According to CNN Money, the 15 analysts offering 12-month price forecasts for The Coca-Cola Co have a median target of $45.00, with a high estimate of $52.00 and a low estimate of $40.00. The median estimate represents a +15.59% increase from the last close.
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