NEW YORK (AFP) - More woes emerged for Coca-Cola as the soft-drink giant said weakness in key markets and a plan for a big jump in advertising would hurt its earnings.
The Atlanta, Georgia-based company was cautious on its 2005 outlook, while sharply lowering its longer-term targets for both volume and operating income growth.
Shares of Coca-Cola, a Dow Jones Industrial Average component, fell more than one percent to 40.69 in midday trade.
In a financial update tied to a meeting by management with investors, the soft-drink giant forecast weakness in North America, the Philippines and Germany next year.
At the same time, Coca-Cola lowered its long-term volume growth target to three to four percent, down from five to six percent previously, while slicing its long-term growth target for operating income to a range of six percent to eight percent from 10 percent.
To top it off, Coca-Cola took down its earnings-per-share growth goal to a rate in the high single digits from a previous range of 11 percent to 12 percent.
Those targets do not apply to 2005, the company said, although its financial performance will be pressured by a variety of factors, including the first impact of a permanent annual increase in marketing spending of 350 million to 400 million dollars.
Its forecast for 2004, recently lowered on low-volume growth, remains unchanged.
"We believe we have outlined realistic and achievable financial growth targets over time. We believe that once we take the necessary steps to get back on our path to growth, our company will be well positioned to reach these targets," said chief executive Neville Isdell.
11/11/2004 - 18:14 GMT - AFP