The product is as recognizable as any on Planet Earth; the bottle found on the ground in tribal Africa in the 1970s cult film "The Gods Must Be Crazy"; the bright red sign in any fast food joint or supermarket worth its salt; the fancy lettering that is instantly identified as Coca-Cola (NYSE: KO).
As an investment vehicle, Coca-Cola also provokes instant identification; it is one of the Dow Jones 30. The business was founded in Atlanta in 1886, the birth year of baseball’s anti-hero Ty Cobb, an early investor who rode his shares in Coke to become one of the first (if not THE first) millionaire-players in the game.
As a brand, Coke has fought an image problem, its rivalry with Pepsi-Cola (NYSE: PEP) resulted in a “new taste of Coke” being produced in the mid-1980s, only to result in a backlash by consumers and major embarrassment from which it took years to recover.
More recently, with concerns reaching a crescendo about North Americans taking in too much with their diets, Coke’s ad campaigns have centered more on what physical, fun activities they can take on to expel those calories and keep waistlines and blood-sugar levels reasonable. Still, Coke’s share of the soft drink pie is not as big as it used to be.
This week, the pop potentate announced that its quarterly earnings totaled $2.68 billion U.S., or 59 cents per share, down 4% from $2.79 billion U.S., or 61 cents per share, in the prior-year quarter. Revenue slid to $12.75 billion U.S., short of the $12.95 billion analysts expected.
Coke cited a variety of factors, cold, wet conditions at home and flooding in parts of Europe for weak volume growth globally.
What’s more, Coca-Cola said soda volume for North America fell last quarter by 4%. But the figure has declined in four of the past five quarters, including a 2% slide a year ago. It was flat in the other quarter.
Meantime, both Coke and Pepsi are endeavoring to come up with a soda that uses a natural, low-calorie sweetener to reverse the slide in U.S. soda consumption, the reason being that such sweeteners often have a bad aftertaste.
Notably, Coca-Cola has yet to roll out a mid-calorie version of Fanta and Sprite using the sweetener stevia that it began testing last summer. Whether these efforts provide a brake on the downward trend for Coca Cola’s bottom line remains to be seen.
Before the close of business on Friday, Coca-Cola stock regained 21 cents, or 0.5%, from the day before to $41.07 U.S. The stock has displayed a 52-week range from $43.43 U.S. (to which the price shot on May 16) to $35.58 U.S. (on New Year’s Eve).
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