New Coke Chief Vows Changes
Published on 9/16/2004 in THE DAY
Coca-Cola's new chairman and chief executive said he isn't satisfied with the company's results, after a worldwide tour revealed a business with vast potential but a long list of problems and no easy solutions.
E. Neville Isdell, who had pledged to stay behind the scenes during his first 120 days in office, instead staged an early debut Wednesday to talk about several issues afflicting Coke's business. He cited shortcomings in everything from sales volume to earnings to depth of management talent in a conference call with industry analysts and reporters.
I came back to the Coca-Cola Co. to make sure that we are the leading growth company in our industry, and to lead our industry into an era of rekindled, accelerated growth,? Isdell said. ?The simple fact is that, today, we're not growing the way we should be.?
The company said sales volume is soft, with third-quarter results likely to be flat to up 1 percent. For the year, Coke projects a volume increase of 1 percent to 2 percent. Coke last hit such lows in 1999, when volume grew 2 percent.
In a one-time break from company policy, Coke also issued projections for earnings per share, which will be dampened by hundreds of millions of dollars in special charges related to Coke's business in Germany. Coke expects to earn a range of 77 cents to 82 cents per share for the second half of the year, with 35 cents to 38 cents for the third quarter.
A year ago, Coke earned 50 cents per share in the third quarter.
With the dour forecast, Coke shares slid 4 percent Wednesday, closing at $41.16, down $1.71. Coke set a 52-week low of $40.38 during the trading day.
Coke's difficulties come as little surprise, given other recent news. On Sept. 8, bottler Coca-Cola Enterprises warned its sales and earnings would fall below expectations, due to bad weather, weak retail trends and consumption shifts based on obesity worries.