- Coca-Cola's profit and revenue fell in the first quarter of 2017 due to weak performance in Latin America, according to the Wall Street Journal. The beverage maker earned $1.18 billion, down from $1.48 billion during the same period a year earlier. Revenue fell 11.3% to $9.12 billion, but came in above analysts’ predictions for $8.87 billion.
- Coke said in a statement it would expand its cost-cutting efforts to create incremental savings of $800 million annually by 2019, bringing the total annualized savings target of the six-year program to $3.8 billion. Soon-to-be CEO James Quincey said the company will cut 1,200 jobs later this year, but did not give any details about the location or functions of those positions.
- The company slightly increased its outlook for the current year. It expects adjusted earnings per share to drop 1% to 3% from $1.91 in 2016. It has previously issued guidance for a 1% to 4% decline.
Coca-Cola, known for its namesake soda, Minute Maid juice and Dasani water, is facing multiple headwinds including challenges in Latin America and a strong U.S. dollar. The beverage maker reported higher costs in the quarter tied with ongoing efforts to re-franchise its low-margin North American bottling operations — a move by the company to cut costs. Coca-Cola recorded an $84 million charge in the period as part of the re-franchising effort.
The earnings report Tuesday was the last for CEO Muhtar Kent, who is stepping down and will be replaced by COO James Quincey next week. With sugary drinks under attack from consumer advocates and the company's revenue declining, Quincey has vowed to move Coca-Cola beyond soda and remake it into "a total beverage company."
Coke said global soda sales during the quarter fell 1%. Juice, dairy, and plant-based beverages were unchanged. Water, enhanced water, and sports drinks rose 3%, and tea and coffee was up 2%.
"We are rapidly evolving our growth model to make changes that will result in an even more consumer-centric portfolio that meets people's changing tastes and preferences," Quincey said in a statement. "Importantly, these portfolio changes will help our consumers moderate the amount of added sugar they consume."
Major soda players Coca-Cola, the Dr. Pepper Snapple Group and PepsiCo all have made a commitment to reduce the number of sugary drink calories that Americans consume by 20% by 2025, and each company is already working to do more with its roster of products to follow through.
Meanwhile, Coca-Cola critics have been pushing the company to make an acquisition — it already has a nearly 17% stake in energy drinks maker Monster Beverage — to help grow revenue, which has fallen for eight-straight quarters. Quincey appears to be the right person to do that given his comments, though as Coca-Cola has shown recently, it's not going to be an easy task to turn around the American soda icon. Without a significant change to its operations and an overhaul to its roster of brands, the soda giant could be ripe for a takeover attempt. AB InBev, the world's largest brewery, has long been connected to a Coca-Cola deal.