Coca-Cola on Wednesday reported a 16% drop in revenue for the second quarter of 2017, to $9.7bn, and a half-year sales decline of 14% to $18.8bn.

The Atlanta-based company blamed the drop on refranchising costs of its North American bottling operations and currency headwinds. The company said that it took a charge of $653m related to its North American bottling operations.

However, despite the drawbacks, analysts hailed the results noting that it was higher than expected. The company’s new CEO James Quincey said that the results were in line with their expectations of turning the company into a total beverage firm.

“Our second quarter results demonstrate continued progress against the strategic priorities we have laid out to accelerate the transformation of our business into a total beverage company with balanced growth across a consumer-centric portfolio,” said Quincey in a statement.

Coca-Cola, like its rival PepsiCo has been diversifying its product portfolio to include non-sparkling beverages such as juices, dairy and plant-based drinks as consumers shy away from sugary drinks, opting instead for healthier alternatives.

The company said it was pleased with the launch of its Coca-Cola Zero sugar which has continued to grow double-digits in Europe, Middle East & Africa and Latin America. The soda giant said it will introduce the brand in the United States this August.

Net income in the second quarter (Apr – June) fell 60% to $1.37bn, while profits for half-year through June 30 declined 48% to $2.56bn.

The company is estimating flat or 2% lower adjusted 2017 profit, as against its previous estimate of a 1% to 3% decline, citing lesser impact from currency exchange rates.