Coca-Cola CEO 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 the Atlanta giant reported mixed financial results for the final three months of last year.
Coke posted a drop in profits for both the fourth quarter and full-year 2016 and said it expects the earnings slide to continue in 2017.
Profits tumbled 56 percent in the fourth quarter, to $547 million, as the strong dollar overseas and divestment of some bottling operations nipped 6 percent off revenue. Much of the decline came from charges related to shedding North American bottling operations, a re-tooling aimed at more efficient and profitable operations.
Coke is grappling with changing consumer tastes and criticism of sugary drinks and has posted revenue declines for four straight years. It said its strategy of smaller servings, which generate higher unit revenue, has shown signs of success.
Adjusting for its sell-off of bottling units, which cut into sales, Coke said “organic” revenue grew 6 percent in the quarter. Similarly adjusted, profit increased 7 percent, the company said, after also backing out the effects of the strong dollar, which made overseas profits appear smaller.
For the full year, skipping such adjustments, profit slid 11 percent to $6.5 billion. Coke said it expects 2017 earnings-per-share to decline 1 percent to 4 percent.
Coke shares slipped almost 2 percent on the financial report.
Kent, who hands over the CEO job this year to James Quincey, noted both pros and cons for the company under the Trump administration. He welcomed plans to seek cuts in corporate tax rates, a goal Coke has long supported. “Corporate tax reform will be good for American business and for all American companies,” he said.
Echoing Trump’s campaign pledge 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.”
Kent stuck by his criticism of Trump’s recent executive order instituting a travel ban on people from seven mostly-Muslim countries, calling it “counter to our core beliefs” and commitment to diversity.
Kent also expressed worry that Trump’s trade rhetoric, which he said “will have a negative impact on global trade.” Still, Kent said Coke can weather any potential overseas backlash 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.”
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