Coca-Cola Chief Executive Muhtar Kent sees a mixed bag of effects from President Donald Trump’s policies, ranging from a travel ban that conflicts with the company’s values to taxation changes that would help its bottom line.
Kent shared his views Thursday as Coca-Cola also reported a mixed bag of financial results for the final three months of last year.
Coca-Cola’s profits fell 56 percent in the fourth quarter, from $1.2 billion a year earlier to $547 million, as the strong dollar overseas and the company’s ongoing re-tooling of its bottling operations nipped 6 percent off the company’s revenue.
Much of the reported profit decline came from $919 million in charges, mostly related to shedding its bottling operations in North America. Coca-Cola executives said that re-tooling will eventually result in more efficient, more profitable operations.
Adjusting for its sell-off of some bottling units, which resulted in smaller operations and smaller sales, Coca-Cola said its “organic” revenue grew 6 percent in the quarter.
Its similarly adjusted net income increased 7 percent, the company said, after also backing out the effects of the strong dollar, which made overseas profits appear smaller when translated into dollars.
For the full year, skipping such adjustments, Coca-Cola reported a 4 percent decline in revenues in 2016, to $41.9 billion, and an 11 percent decline in net income, to $6.5 billion.
Kent highlighted both pros and cons for the Atlanta soft drink giant as Trump continues to shake up things.
Late last year Coca-Cola announced that Kent is stepping down on May 1 after nine years as CEO, but will remain chairman of the board. The incoming CEO is James Quincey, now Coke’s chief operating officer.
Kent welcomed the administration’s plans to seek cuts to the federal corporate tax rate from 35 percent — a goal Coca-Cola has supported for years. “Corporate tax reform will be good for American business and for all American companies,” he said.
Echoing Trump’s campaign slogan to “make America great again,” Kent added, “We’re an American-based company…We want America to succeed. There’s nobody that wants America to succeed more than us.”
But Kent was also one of several CEOs at major U.S. companies who criticized Trump’s recent executive order instituting a travel ban on people from seven mostly-Muslim countries, and he stuck to his guns Thursday.
“I made the public statement because of … how resolute we are in our commitment to diversity,” said Kent. Trump’s ban is “counter to our core beliefs,” he said.
Kent likewise expressed worry about Trump’s promises to reverse U.S. trade pacts with Mexico and other countries, and to tackle what the president called China’s unfair trade practices. Both Mexico and China were strong markets for Coca-Cola in the fourth quarter.
Such “rhetoric will have a negative impact on global trade,” Kent said.
But Kent also said he is confident that Coca-Cola will be able to weather any potential overseas backlash to Trump’s policies, because its products are sold in more than 200 countries by locally-owned businesses.
Even in past years when “Brand America” was at a low point overseas, he said, “internationally we didn’t suffer.”