Coca-Cola recently released its 2018 results and now the beverage giant pointed on macroeconomics as one of the main reasons why stocks were weak and will probably get weaker this year.
The tenured company's 2018 results revealed that net revenue declined by 6 percent in the last quarter of last year. For the entire year, profits dropped by 10 percent, which is equivalent to $31.9 billion, CCN reported.
While Coke said macroeconomics played a role in weighing down on its annual figures, other rival companies such as PepsiCo did not cite the matter as a huge problem. Instead, the latter raised its forecast for 2019.
Coca-Cola CEO John Quincey explained that uncertainties in "global macroeconomic conditions" affected sales in 2018. He added that "Argentina went down quite strongly in the fourth quarter and that's likely to continue in the first half of this year. Turkey, very similarly, some parts of the Middle East."
Some financial analysts have questioned Coke's claims about macroeconomics. Since PepsiCo appears to be doing fine and the competing corporation is confident of their guidance for 2019, experts suggested that Coca-Cola's less confident forecasts could have affected overall growth.
These indications echo Coca-Cola Amatil's (CCA) recent move of downgrading the value of its SPC canned vegetable and fruit operations to zero. The Sydney Morning Herald reported that CCA pointed to sales process uncertainties and non-binding indicative offers from overseas bidders as the reasons for its decision to cut its SPC value to zero.
Ever since CCA acquired SPC in 2005, there have been losses, along with the Australian dollar's ascent and rival companies stocking private-label brands from foreign providers.
CCA previously wrote-down its SPC's book value in 2016 to $172 million. Despite the latest write-down, the major Coke bottler said it will have no impact on employment, operations, or production as the business continues to roll.
Meanwhile, Coke and other competitors may experience a beating if Gov. Ned Lamont's reported sugary drinks tax proposal gets approved. According to Hartford Business, Lamont's first budget proposal seeks to resurrect a tax hike on sugary drinks.
The Capitol debated on this topic two years ago and Lamont has a goal to take the matter to the legislature on Wednesday. Chris McClure, a spokesman for the governor's budget office, explained that the sugar tax will particularly focus on encouraging healthy eating habits.
Should Lamont's proposal get a check mark, Coca-Cola, PepsiCo, and other companies selling sugary drinks are expected to go through a rough patch.
