Seeking Alpha

Coca-Cola lower after earnings and guidance disappoint

  • Coca-Cola (KO) tips off that it will make up for soft volume growth with productivity improvements.
  • The company sees $1B in savings by 2016 through the initiatives with a decent portion of those funds going back into marketing new products.
  • Guidance from the company is below expectations, due in part to expected currency swings.
  • KO -2.1% premarket
Comments (4)
  • redarrow5150
    , contributor
    Comments (990) | Send Message
     
    Can't grow the business so KO does two things to hide it's breakdown of business; Buy a product (Green Mt) to instill growth and cut business expenses so your bottom line looks better. KO is very vulnerable right now as growth stalls cutting expenses will not keep up with lack of demand. Also another headwind is currency so KO is going to have a very difficult year (if not a few) with current pipeline. KO is sitting on a ton of cash so they need to either up the divy quite significantly or find more products to purchase. Given today's earning reports there's no reason to buy KO at these current levels and suspect they will head below $35 over these next few months.
    18 Feb, 09:29 AM Reply Like
  • chopchop0
    , contributor
    Comments (3131) | Send Message
     
    agreed. No capital appreciation since spring of 2012. This is one blue-chip dog.
    18 Feb, 10:11 AM Reply Like
  • Tradevestor
    , contributor
    Comments (4014) | Send Message
     
    Consider Coke at 3.2% yield? http://seekingalpha.co...
    18 Feb, 12:02 PM Reply Like
  • redarrow5150
    , contributor
    Comments (990) | Send Message
     
    Nope. Not the time to jump in and would wait a 7-10 days just to see how it shakes out. I suspect you'll see some downgrades next week for several reasons; continuing volume decline, visibility will be poor for currency volatility and the street HATES Green Mountain Coffee. The sentiment on KO from the market will be negative on them and now the bandwagoneers will jump on the PEP bandwagon.
    18 Feb, 03:01 PM Reply Like
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