Coca-Cola Cuts 2001 Volume Growth Outlook

Coca-Cola Co. Tuesday lowered its volume growth outlook for the year to a level widely anticipated by Wall Street and said it remains confident it will meet its earnings target for the year despite a slowdown in U.S. growth rates since the attacks.

Atlanta-based Coca-Cola, the world’s top soft-drink company, cut its full-year forecast for unit case volume growth to 4% to 5% from a previous target of 5% to 6% growth. Unit case volume is a key measure of financial health in the soft-drink industry.

“The Street didn’t expect 5% to 6% [volume growth]. The Street very much had the 4% to 5% view, so that’s why the stock is doing well,” said ABN Amro beverage analyst Mark Swartzberg. “In this atmosphere, a company doing what the Street expects is clearly a good thing.”

Shares of Coca-Cola edged down 3 cents to $48 on the New York Stock Exchange after climbing as high as $49.26 earlier in the session.

“Even though the underlying fundamental strengths of our business have not changed, caution dictates that we closely monitor the increased uncertainty in macroeconomic conditions,” Chairman and Chief Executive Douglas Daft said. “Not surprisingly, following the tragic events of Sept. 11, we have experienced lower growth rates in the United States.”

UBS Warburg beverage analyst Caroline Levy said it was surprising that Coke said U.S. sales had shown a reaction to the recent events.

Coke also said it expects its unit case volume to grow by about 3% in North America for the quarter, also in line with earlier views of analysts.

The company said it sees third-quarter unit case volume up 3% to 4% in both its Latin America and Europe, Eurasia and Middle East regions. The company also said it sees third-quarter volume jumping 8% to 9% in Africa and 7% to 8% in Asia.