Demand for core soft drinks has been decreasing due to changing consumer trends as the consumers shift towards healthier options. In order to address this issue, Coca-Cola has been buying last year in the niche beverage domain which would help it to bolster growth. This is expected to act as a tailwind in 2019.
Coca-Cola has introduced a new segment in January called Global Ventures. This segment would report results from Costa Limited, Dogadan businesses and fees received from Monster Beverage.
For the first quarter, analysts expect a modest decline in earnings of $0.46 per share over $0.47 reported last year and sales to come in at $7.89 billion, an increase of 3.5%. Despite weak macros and multiple headwinds, Coca-Cola’s cost-saving initiatives and recent acquisitions would help the firm to report results in line with estimates.
Related: Pepsi Q1 2019 earnings performance
Fiscal 2019 Outlook
For the fiscal 2019 period, Coca-Cola expects a 4% jump in adjusted revenues. On a Non-GAAP basis, the beverage giant expects operating income on an FX-neutral basis to grow 10% to 11%. Operating cash flow is expected to come in at least $8 billion while CapEx for the year is forecasted about $2 billion excluding discontinued operations.
However, the company added that EPS would be up or down 1%, which failed to impress the street. As a result, the stock tumbled more than 8% recording the biggest intra-day losses in recent times due to weak earnings outlook. Analysts now have scaled down their estimates for the 2019 period and are expecting EPS of $2.09.
Q4 Performance
In the fourth quarter, revenue decreased 6% to $7.06 billion, while Coca-Cola reported a profit of $870 million compared to a loss of $2.75 billion last year. Net income from continuing operations was $0.18 per diluted share over a loss of $0.66 a share a year ago. Q4 results came in line with market estimates.
