Coca-Cola shares plunged in morning trading Thursday after the company released gloomy projections for its 2019 earnings. The beverage giant said it’s struggling due to weak emerging markets like Argentina and Turkey and a slowing global economy.
Shares slumped 6.9 percent to $46.33 at mid-morning. The company's 2019 projections of four percent organic sales growth and profit targets lagged behind analyst expectations.
Unit case volume in Latin America declined 2% in the quarter, the company reported. A startling double-digit decline in Argentina brought down total sales despite growth in Brazil, Colombia and Peru.
Quincey said weakness in Turkey and other countries in the Middle East and Africa, in addition to Argentina, hampered the company's outlook. He also cited the lower 2019 International Monetary Fund growth forecast as a factor in its projections.
"We are being cautious about the macroeconomics and how that is going to be a little softer than 2018," Chief Executive James Quincey said on a conference call with analysts
Several analysts questioned the company over its outlook, which held that 2019 earnings per share would be in a range significantly below the $2.28 seen by analysts.
"We've baked in what we see and what we believe is likely to be the softening of the global macro outlook and in the countries which are more apparent," Quincey said.
Later, in an interview with CNBC, Quincey characterized the outlook as "very much related to the macro environment" rather than challenges facing the soda industry.
The cola giant reported quarterly earnings of $870 million, compared with a loss of $2.8 billion in the year-ago period when it was hit by one-time tax costs.
Revenues fell six percent to $7.1 billion due to the sale of bottling operations to franchise companies.
Coca-Cola and rivals have had a hard time boosting sales of soda due to worries about health and obesity.
The company has responded with more small packages, revamps of popular diet sodas and increased offerings in water and non-soda beverages.
The company's beverage portfolio now includes coconut water products in Brazil, an almond-based drink in Chile and a no-sugar coffee-chocolate drink in Australia.
The company also acquired Costa Coffee for US$5.1 billion, a deal that closed in January.