NEW YORK (AFP) - Shares of Coca-Cola slumped to a 52-week low after the soft-drink giant warned that bad weather in Europe and weak sales in North America would puncture its previous 2004 profit hopes.
Shares of the world`s biggest soft drink maker tumbled 1.95 or 4.5 percent to 40.92 dollars in morning trade.
Neville Isdell, chairman and chief executive officer, said that although the company normally refrains from specific earnings guidance, "we have made an exception today in the interest of clear and timely communication."
"We want to inform investors of business trends that are significantly impacting our operating environment," he added.
Coke said worldwide unit volume is expected to increase just one to percent percent for the full year 2004, with growth for the third quarter in the range of flat to one percent growth.
The company also said it sees "continuing challenging conditions in the fourth quarter."
The profit outlook for the third quarter was set at 46 to 48 cents per share, excluding a special writeoff, well below the 55 cents per share expected on Wall Street.
The group said bad weather in Europe and a new deposit law on non-returnable beverage packages enacted in Germany were impacting sales, and that it was also seeing "unfavorable volume trends" in the America.
"I am not satisfied with this performance or the anticipated results," the chief executive said.
"They are symptoms of problems that demand strong corrective actions and initiatives that will put this company firmly on its proper growth course. That is my unmistakable and immediate objective."
Merrill Lynch downgraded Coca-Cola from "buy" to "neutral."
In a note to investors, analyst Christine Farkas wrote that the announcement "suggests further challenges ... that may take longer to resolve."