Coke Fizzles

It used to be the kind of dependable stock that soothed investors’ nerves. But lately, Coca-Cola is faring worse than some emerging markets.

Coca-Cola shares fell 4.6% on Tuesday as sales slow in key international markets such as Brazil, Russia and Japan, extending a two-month slide that has reduced its share price by more than a third.

Stock of the world’s largest soda maker fell $2.81 to $56.38 in trading of 9.1 million shares, more than double the three-month daily average. The stock peaked in mid-July at $87.94. Its drop in the last two months is about triple the 11% decline in the blue-chip Standard & Poor’s index of 500 stocks.

Coca-Cola does business in 197 countries and gets 70% of its sales and 75% of its profit from international operations. The company is expected to post third-quarter sales declines in Indonesia, Thailand and Korea, whereas Japan and Brazil--two of its top five markets--are expected to eke out sales gains.

“Worldwide sales volumes have been growing at a 10% annualized growth rate, and people are worried that it will slow down because of problems overseas,” said Robert Streed, a money manager with Northern Trust Co.

Salomon Smith Barney analyst Jennifer Solomon cut her 1998 earnings estimate Tuesday to $1.54 per share from $1.60 and her 1999 earnings estimate to $1.68 from $1.85 as a result of slower sales growth projections.

Trouble spots include Indonesia, where sales are expected to drop 30%; Thailand, where sales could fall 5%; and Venezuela, where sales could drop 3%, Pecoriello said. Sales in Japan, where Coke gets an estimated 17% of its profit, are expected to gain 1%.

“What a lot of people are getting nervous about is that the volume growth is weakening,” said Donaldson, Lufkin & Jenrette analyst Skip Carpenter, who has a “market perform” rating. “The big question now is Latin America. Will we see volume growth there slowing?”