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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (924)	12/8/2005 12:33:12 AM
From: richardred	Respond to of 7256

Coke backs targets, revamps ads Wednesday December 7, 7:16 pm ET By Anupama Chandrasekaran NEW YORK (Reuters) - Coca-Cola Co. (NYSE:KO - News) on Wednesday revealed its hipper side with a slew of innovations and packaging along with a new marketing slogan that Coke's Chief Executive Neville Isdell said will help drive its previously forecast volume and profit growth. Analysts attending the world's largest soft drink maker's investor conference applauded the initiatives, but some noted the new product introductions seemed risky and expressed disappointment about no big acquisition being in the horizon. Atlanta-based Coca-Cola, which has struggled for five years to boost sluggish soft drink sales and meet changing consumer tastes, said it still expects earnings-per-share growth in the high single-digit range. Coke also stood by an earlier forecast for long-term annual operating earnings growth of 6 percent to 8 percent. Unit case volumes, a key sales measure in the beverage industry, are still forecast to rise between 3 percent and 4 percent per year, the company said. "I heard from you, from our bottlers and our people that we had an innovation deficit, and they were right. So we have stepped it up," Isdell told an audience of more than 200 people at the Hudson Theater in New York. Chief Financial Officer Gary Fayard said that currency translation would likely be a drag on next year's results. A stronger dollar hurts U.S. companies as it reduces the income from overseas when converted into U.S. dollars. Fayard also said Coke plans to spend $2 billion to $2.5 billion on share repurchases and boost its dividend next year. "It is going be tug of war between underlying fundamentals, which are looking better, and the currency, which they have no control over and it could be a big negative," said John Faucher MAKEOVER TIME Coca-Cola discussed plans for new carbonated and non- carbonated drinks and for attractive packaging in the form of colorful 200 ml aluminum bottles, during the presentation. Coca-Cola Blak is a new cola-coffee beverage that will debut next month in France. Also during the presentation, Coke marketing chief Mary Minnick said Coke was introducing higher- margin extensions in the fast-growing water category and that it plans to launch "Tab" energy drink targeting women. Minnick also announced the company's new advertising slogan: "Welcome to the Coke Side of Life." Coca-Cola has introduced several diet and reduced-calorie drinks in recent months to meet changing consumer tastes. It is also now packaging Coca-Cola in an 8.4 ounce can and touting the serving has just 100 calories, Minnick said. The company vowed to give higher-margin single-serve drink packages a stronger push. The company unveiled a new advertising campaign expected to debut in North America during the 2006 Winter Olympics that will promote wellness and showcase its broad lineup of drinks, The wellness campaign comes amid obesity concerns in the United States, particularly among children. "It's a transformation of the company from everything starting from product lines to distribution to retail accounts and they have put a lot of effort into it and they have to make it work," said Michael Bellas, chairman and chief executive of Beverage Marketing Corp., a research and consulting firm. SMALL ACQUISITIONS PLANNED Isdell said the company would likely pursue more "bolt-on" or smaller geographic acquisitions in 2006. Some industry watchers have said Coke fell behind competitors such as PepsiCo Inc. (NYSE:PEP - News) since it held off from acquisitions and took less risks with innovative products. "They need an acquisition so that they can channel capital into something other than bolt-ons," said Douglas Lane, president of Douglas C. Lane & Associates, which holds 600,000 shares of Coke. "Pepsi shares have outdone Coke's because they have taken the risk." Coke's shares have fallen about 17.5 percent since Isdell became CEO in 2004 and are 52 percent off their lifetime high of $88.94 set in July 1998. By contrast, rival PepsiCo's stock has soared 57 percent over the same period. Coca-Cola shares closed down 34 cents, or 0.8 percent, at $42.20 on the New York Stock Exchange on Wednesday, while PepsiCo slipped 23 cents to $59.22. (Additional reporting by Jessica Wohl in Chicago and Nichola Groom in Los Angeles) biz.yahoo.com