The Coca-Cola Co. the worlds largest beverage company unveiled a plan to reduce annual expenses and lowered its previous financial targets after sales missed analysts projection.
Coca-Cola reported that revenue decreased to $11.98 billion in the recent quarter, compared to $12 billion last year and the $12.12 billion estimate of analysts polled by Thomson Reuters.
On Tuesday the company said it would aim for $3 billion in yearly savings from its reworked productivity plan by 2019. The plan was first revealed to the public in February with the goal of reducing costs by $1 billion.
Net income in Q3 dropped 14% to $2.1 billion or, $0.48 per share, compared to $2.45 billion, or $0.54 per share year-to-year, and analysts view for $0.53 per share.
As part of the cost cutting plan, Coca-Cola plans to sell off a high number of distribution territories in North America by 2017 and refranchise what is left by 2020.
“We have taken a hard look at our progress to date and realize that while the strategies we laid out at the beginning of the year are on the right track, the scope and pace of our actions must increase,” CEO Muhtar Kent said in a statement.
Mr. Kent has faced criticism from investors regarding the company’s actions not being efficient in the battle with the slowdown of international growth.
Coca-cola announced in August that it would purchase a 16.7% stake in Monster Beverage Crop. for $2.15 billion as part of an asset swap. It is also working with Keurig Green Mountain Inc. on the development of a cold beverage system.
The Coca-Cola maker said that 2015 would be challenging for the company. It kept its aim for high single-digit percentage growth for earnings per share after this year but decreased the lower end of its long-term net revenue growth target to 4%, from the previous 5%.
The Coca-Cola Co. climbed 0.96% on Monday and closed at $43.29 in New York. On Tuesday the stock fell 6.46% to trade at $40.50 at 14:59 GMT, marking one-year increase of 4.31%. The company is valued at $189.87 billion.
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