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updated: 7/22/2014 9:46 AM

Coca-Cola misses sales estimates amid juice, Diet Coke slide

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Bloomberg News

Coca-Cola Co., the world's largest beverage company, reported second-quarter sales that missed analysts' estimates amid sluggish demand for drinks such as juice and Diet Coke in North America.

Revenue fell 1.4 percent to $12.6 billion in the period ended June 27, Atlanta-based Coca-Cola said today in a statement. Analysts had estimated $12.8 billion on average, according to data compiled by Bloomberg. Global juice sales volume declined 1 percent, hurt by price increases in North America to offset higher ingredient costs.

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Chief Executive Officer Muhtar Kent is cutting costs and overhauling marketing as he contends with a slowdown in the market for fizzy beverages. Coca-Cola also is increasingly relying on overseas markets to maintain growth.

"Coke's Q2 result was weaker than expected," said Dara Mohsenian, an analyst at Morgan Stanley in New York. "The bar is low for Coke, but with weak topline results, worse than expected underlying profit, and slight negative EPS guidance revisions in H2, we would expect the stock to be down today."

Coca-Cola shares fell 3 percent to $41.09 at 10:08 a.m. in New York. The shares had risen 2.6 percent this year through yesterday, compared with a 6.8 percent gain for the Standard & Poor's 500 Index.

Global sales volume rose 3 percent in the quarter, matching the average of four analysts' estimates compiled by Bloomberg. Sales volumes in key Europe, Latin America and North America business units were little changed. Brand Coca-Cola volume grew 1 percent in the quarter, a sequential improvement.

Gross Margin

Gross margin in the quarter rose to 61.7 percent from 60.9 percent a year ago. Analysts had estimated 61.1 percent. The additional cash was largely spent to boost global marketing, the company said.

"We remain focused on the work required to return our business to the level of sustainable growth we and our shareowners expect," Kent said in the statement.

Net income fell 3 percent to $2.6 billion, or 58 cents a share, from $2.68 billion, or 59 cents, a year earlier, Excluding some items, earnings were 64 cents a share, compared with a 63-cent average of 19 analysts' estimates compiled by Bloomberg.

(Coca-Cola will hold a conference call at 9:30 a.m. New York time to discuss results. To listen, visit LIVE .)

To contact the reporter on this story: Duane D. Stanford in Atlanta at dstanford2bloomberg.net To contact the editors responsible for this story: Nick Turner at nturner7bloomberg.net Ben Livesey

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