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Coca-Cola Q4 Adj. Profit Meets View, But Shares Fall On Weak Outlook

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Beverages giant Coca-Cola Company (KO) on Thursday reported a profit for the fourth quarter, compared to a loss in the year-ago period that included a hefty one-time charge related to the U.S. tax reform.

Adjusted earnings per share for the quarter matched analysts' expectations, while revenues beat their estimates. Looking ahead, the company forecast fiscal 2019 earnings below analysts' expectations. The company's shares are losing more than 2 percent in pre-market activity.

Fourth-quarter net income attributable to shareowners of Coca-Cola was $870 million or $0.20 per share, compared to net loss of $2.75 billion or $0.65 per share in the previous-year quarter.

The prior-year period's results include a one-time net charge related to the Tax Reform Act of $3.61 billion.

Comparable earnings from continuing operations for the quarter were $0.43 per share, compared to $0.39 per share in the prior-year period. On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.43 per share. Analysts' estimates typically exclude special items.

Net operating revenues for the quarter declined 6 percent to $7.06 billion from $7.51 billion in the year-ago period, impacted by headwinds of 13 percent from the combined impact of currency and the refranchising of bottling territories. The Street expected revenues of $7.03 billion for the quarter.

Organic revenues grew 5 percent in the quarter, driven by price/mix growth of 4 percent and concentrate sales growth of 1 percent. Unit case volume growth was even in the quarter.

Looking ahead to the first quarter, Coca-Cola said its comparable net revenues will face a 6 percent to 7 percent tailwind from acquisitions, divestitures and structural items; and 6 percent to 7 percent currency headwind based on the current rates and including the impact of hedged positions.

For fiscal 2019, Coca-Cola forecast comparable earnings per share from continuing operations growth in a range of -1 percent to 1 percent growth, compared to earnings of $2.08 per share in 2018.

In addition, the company projects about 4 percent growth in organic revenues, and 10 percent to 11 percent growth in comparable currency-neutral operating income, both on an adjusted basis.

The Street expects earnings of $2.22 per share for the year on revenues of $33.28 billion.

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