$KO Miss Takes Some Buzz Out of the Market
Coca-Cola, $KO, took some of the fizz out of the Japan Kool-Aid today.
The $SPY and $DIA initially climbed on news that Japan would expand lending programs to boost the world’s third largest economy. But they fell flat before 11a.m. as traders digested data indicating the U.S. recovery may not be as robust as hoped.
Coca-Cola, a soft-drink giant seen by some as an indicator of consumer spending, missed Wall Street consensus estimates on sales. The company reported sales of $11.04 Billion, falling short of the $11.31 Billion consensus estimate, according to data from the Analyst Ratings Network. EPS, excluding certain items, met expectations of $0.46.
$KO's lackluster earnings have it down nearly 4% and has already traded nearly half of its ADV
— Dividend.com (@dividenddotcom) Feb. 18 at 09:57 AM
North America sales volume declined 1%. In its earnings report, Coca-Cola described the conditions in the North American market as difficult. Currency-neutral operating income in the region fell 3% in 2013 from the prior year. “The overall NARTD industry in North America continued to be impacted by a challenging external environment.”
$KO also guided for a difficult year, mainly due to currency fluctuations. The company said exchange rates would have a 7% negative impact on 2014 operating income and a 10% “headwind” on first quarter operating income.
— Paul La Monica (@lamonicabuzz) Feb. 18 at 09:56 AM
Even the promise of coming share repurchases and dividend increases failed to lift the stock. In its earnings release, the company said it would repurchase $2.5 to $3.0 Billion in stock during the year. Cashtaggers also anticipated a dividend increase later this month when many companies hike payouts to shareholders.
Coca-Cola $KO management will recommend dividend increase, according to CFO
— FinancialJuice (@FinancialJuice) Feb. 18 at 10:05 AM
$KO wasn’t the only buzz kill. Factory data out of New York, NJ and some parts of Connecticut continued to sap the energy out of the market. The “Empire State Index” showed manufacturing gains had slowed significantly, potentially due to cold weather. New orders fell into negative territory.
Interestingly, the $KO miss actually seemed to fuel interest in new partner Green Mountain Coffee Roasters, $GMCR. Last week, Coca-Cola and GMCR announced a deal to develop a Keurig cold brew beverage system.
— Dan Betz (@danbetz) Feb. 18 at 09:40 AM
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