|By Sruthi Ramakrishnan1/2 |By Sruthi Ramakrishnan
|By Sruthi Ramakrishnan2/2 |By Sruthi Ramakrishnan
By Sruthi Ramakrishnan
(Reuters) - Coca-Cola Co <KO.N> reported lower-than-expected quarterly revenue due to weakness in China and certain Latin American economies, and the company warned of no improvement in those markets for the rest of the year.
Shares of the world's largest beverage maker, which also cut its full-year organic revenue growth forecast, fell 3.63 percent to a more than three-month low of $43.25 on Wednesday.
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Sales in China are being pressured as wholesalers bring down inventory levels in response to weakening consumer environment in the country, Chief Operating Officer James Quincey said on a post-earnings conference call.
China's economy grew 6.7 percent in the second quarter from a year earlier, the slowest pace since the global financial crisis.
Coke said it was working to combat changing consumer tastes in China, such as the growing demand for premium water and the falling popularity of its juices, by introducing more premium offerings and expanding in second-tier and rural areas with more affordable products.
The company, like several other multinational companies, is also struggling with high levels of inflation in some Latin American economies, including Brazil, Venezuela and Argentina.
Quincey said recent steps taken by Argentina to improve its economy caused a near-term contraction that accelerated in the second quarter, impacting the company's business there.
Latin America accounted for 9 percent of Coca-Cola's total revenue in 2015.
Coke reduced its forecast for organic revenue growth to 3 percent in 2016 from 4-5 percent growth estimated earlier.
Organic revenue excludes the impact of currency movements, acquisitions and divestitures.
Revenue from North America, the company's largest market, rose 2 percent in the second quarter ended July 1, while revenue fell in all other regions.
The company's net operating revenue fell 5.1 percent to $11.54 billion, the fifth straight quarter of decline.
Coke and rival PepsiCo Inc <PEP.N> have been struggling as consumers increasingly turn health-conscious and cut back on fizzy drinks and opt for teas, fruit juices and smoothies.
Coke has responded by building its non-carbonated drinks portfolio, expanding beyond North America and cutting costs by refranchising its bottling operations.
Net income attributable to shareholders rose 11 percent to $3.45 billion, or 79 cents per share, in the quarter.
Excluding items, the company earned 60 cents per share.
Analysts on average had expected earnings of 58 cents per share on revenue of $11.63 billion, according to Thomson Reuters I/B/E/S.
Coca-Cola also said on Wednesday it signed letters of intent with two U.S. bottlers to expand distribution areas in two states.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Maju Samuel and Sriraj Kalluvila)