Coke suffers third Quarter profit decline on foreign currency related headwinds
Atlanta-based Coca-Cola on Wednesday reported a 7% drop in revenue for the third quarter ending September 30, 2016 to $10.63bn from $11.4bn in the previous year, impacted by a foreign currency exchange headwind of 2% and headwinds from acquisitions, divestitures and structural items of 8%.
The soft drink giant said its net income also fell 28% to $1.05bn, from the prior year’s $1.45bn.
However, the company said its global volumes rose 1% and its better-than-expected revenue performance was helped by higher prices for sodas and a strong demand for water and sports drinks such as Dasani and Powerade in North America. The company also reported growth of its Sprite, Fanta and energy drink brands in North America, offsetting a decline in Diet Coke.
Globally, the company saw revenue decline 4% in Europe, Middle East and Africa region to $1.85bn, from $1.93bn in the previous year; 4% sales decline in Latin America to $965m, from $1bn in 2015; 3% growth in North American region to $2.7bn, from $2.6bn in the preceding year and 4% revenue growth in Asia pacific region to $1.46bn, from $1.406bn in the preceding year.
The company said it would maintain its outlook for 3% growth in organic revenue for the full year. It also said it remains on track to accomplish its re-franchising by the end of 2017.