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Cola Cola Q3 revenue drops nearly 5% in Australia

Cola Cola Q3 revenue drops nearly 5% in Australia

CANBERRA: Report on Coca-Cola profit and revenue this quarter shows a drop of nearly 5%. A strong dollar has resulted to a less value in Coca-Cola revenue from outside North America. The global economic slowdown also affected Coca-Cola revenues resulting a revenue cutback.

According to Wall Street Journal despite the right steps Coca-Cola has taken to restore growth, but the challenging global economy, such as slowdown in China, volatility in the Middle East and weakness in the commodity-dependent economies of Australia, Brazil and Russia, has created  a less than expected result.

Furthermore, Coca-Cola Chief Financial Officer Kathy Waller told reporters on Wednesday that the condition will be more difficult even in 2016.

Still, the owner of Coca-Cola, Sprite, and Fanta brand has to make more effort to increase their shareholders value. Wall Street Journal also took note of how successful Coca-Cola in eliminating their regional management layer in the organization, and introducing a version of zero-based budgeting, redirecting savings to marketing in a bid to jump-start sales.

Coca-Cola also acquired 16.7% share of Monster Beverage energy drink in 2008 and it has delivered a positive result until recently. In this quarter, the revenue in North America was contributed much by Monster Beverage sales.

One of the main reasons for the plunge of Coca-Cola revenue is the foreign exchange issue. As dollar get stronger, the value of sales from the market outside North America is lessened although sales from the region outside North America also reduced.

As reported by CNBC  the sales in three major regions – Asia-Pacific, Latin America, and Europe – decrease quite significantly in this quarter. This third quarter result shows Coca-Cola sales rose 1 percent in North America while sales decline was experienced in Asia-Pacific by 11 percent, 14 percent in Latin America, and Europe by 7 percent.

Coca Cola third quarter result shows that their $11.43 billion revenue, or 5% lower than expected. Even though a lower revenue is happening this quarter, but shareholders earning per share is above the expected 50 cents per share. Coca-Cola reported their quarterly earnings of 51 cents per share.

Nevertheless, with the declining result of earning, Coca-Cola warned of the bigger hit in their revenue. According to Reuters, a bigger than expected drop was hurting Coca-Cola full-year revenue more than previously anticipated.

As a global company, Coca-Cola expected their global sales to contribute much in their revenue. Up to now, Coca-Cola sells their bottled soda water in every country around the world, excluding North Korean and Cuba. Fluctuations of currency exchange will hurt their profit and revenue from their global operations

Coca-Cola has been a public company since 1920 and it has been one of the companies that make up Dow Jones Industrial Average, a stock market index. Therefore, Coca-Cola market performance is always considered as an indicator of the market.