Coca-Cola Co.

Coca-Cola Co. is facing declining demand for its products in North America. (Scott Olson / Getty Images / February 18, 2014)

Coca-Cola Co., faced with tepid demand and a drop in fourth-quarter earnings, said Tuesday it was initiating a $1-billion cost-cutting campaign to improve profitability.

The world's largest beverage company said Tuesday that profit fell 8.4% in the fourth quarter of 2013 compared with the same period a year earlier.

Investors were selling on the news. Shares of the Atlanta company were down $1.46, or nearly 4%, to $37.47 at 9 a.m. PST.

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Coca-Cola said its fourth-quarter net income fell to $1.71 billion, or 38 cents a share, from $1.87 billion, or 41 cents, a year earlier.

Muhtar Kent, Coke's chairman and chief executive, said in a release that the company remained confident about the coming year.

“While we move forward in what remains an uncertain global economy, the long-term fundamentals driving our business and industry have not changed," he said.

"We see many reasons to believe we can accelerate our growth .... We are committed to accelerating marketing investments in our brands, further advancing our innovation strategies and maximizing productivity and reinvestment for growth."

Sales of Coke's carbonated beverages fell 3% in North America during the quarter, the company said.

Kent said the company planned to reduce costs through "information technology system standardization" and reinvest that money in marketing in order to increase demand for its beverages through increased media spending.

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