O.T. - "rant" about the "great" Coca-Cola Corp.
If I am doing the math correctly, KO now has a compounded annual sales growth rate (for the period 1995 - 1998) of about 1.4 %
Are you kidding ?
(Sales were $18.02 billion in 1985, according to Hoover's Online).
Here is a NYT article on their current results.
Jon.
January 27, 1999
Coca-Cola Cites Drop in Earnings for Quarter
and Year
By CONSTANCE L. HAYS
Confirming the bad news it had warned Wall Street about in December,
Coca-Cola Co. reported its fourth-quarter earnings Tuesday, which
showed that the global soft-drink giant suffered significant declines in
volume and revenue in many parts of the world.
Even though much of the damage had been expected, Wall Street seemed
unsettled by the details. Shares of Coca-Cola fell 37.5 cents, to $62.5625,
after losing about 3.5 percent at one point during the day.
Net income fell 27 percent, to $597 million, or 24 cents a diluted share,
compared with $817 million, or 33 cents a share, in the quarter a year earlier.
The earnings were in line with analyst expectations, which had been revised
after a meeting with Coke's senior managers last month.
Coke's revenue for the quarter was $4.46 billion, down 5 percent from $4.7
billion. While its costs declined by 11 percent, its selling, administrative and
other expenses rose 7 percent. Operating income declined by 20 percent, to
$937 million from $1.17 billion, and the company posted a $71 million loss in
equity income, largely from the company's selloff of some bottling operations
and losses encountered by some bottlers that it still owns.
The company's spending on marketing and other expenses rose to $2.22
billion in the quarter, nearly 50 percent of its revenue. Case volume sales fell 1
percent worldwide in the quarter, but individual countries revealed more
drastic declines.
Volume dropped 3 percent in Brazil, the company's second-largest
international market, and rose just 1 percent in Japan, the source of 20
percent of Coke's profits. Volume in Japan for the full year was flat, the
company said.
"Japan is crucial to their near-term and long-term outlook," said Emanuel
Goldman, an analyst for Merrill Lynch & Co., who added that the situation
there remained "sticky" for the foreseeable future.
Volume fell 1 percent in Germany, Coke's fifth-largest market, in the fourth
quarter and was down 2 percent for the year. South Africa sales fell 14
percent for the quarter because of deteriorating economic conditions that
began with the devaluation of the rand in May, a Coca-Cola spokesman said.
The bright spots included the United States, where sales increased by 5
percent in the quarter; China, where sales grew by 24 percent, and India,
which posted growth of 26 percent. Worldwide, Coca-Cola's volume rose 3
percent for the year, compared with 10 percent in 1997.
Earnings for the full year were $3.5 billion, or $1.42 a share, compared with
$4.1 billion, or $1.64 a share, in 1997. Annual revenue was $18.81 billion,
down slightly from $18.87 in 1997.
The company's full-year earnings statement highlighted various bottler
acquisitions and investments, including an acquisition in Russia, the spinoff of
Coca-Cola Beverages from Coca-Cola Amatil, another anchor bottler, and
investment in bottling businesses in India.
Full-year results were affected by the fourth-quarter performance. In Latin
America, volume grew just 7 percent, compared with 12 percent in 1997. In
the Middle East and Southeast Asia, operating income declined 7 percent for
the year, primarily because of currency devaluation.
"The key driver for 1999 will be how well will key profit centers like Japan
and Germany perform," said Andrew Conway, an analyst for Morgan Stanley,
Dean Witter. He expects currencies to stabilize, which should benefit the
company, which he estimates lost 12 cents a share in earnings for the year
because of currency devaluations.
"There's not an awful lot they can do," Goldman said. "Sometimes, they're not
the master of their own destiny."
Copyright 1999 The New York Times Company |
