Coca-Cola warned yesterday that third-quarter earnings would be lower than expected, admitting the impact of this summer's massive product recall in Europe had been larger than it predicted.
The warning annoyed analysts and investors, who were repeatedly assured by the soft drinks giant that the European health crisis would only marginally affect earnings in the second half of this year.
Instead, Coke is expected to take a charge of two to three cents a share from the product recall, which is roughly the same hit it took in the second quarter. The company also said the withdrawal would continue to have an impact on fourth quarter results.
Coke predicted third quarter profits at 34 cents to 35 cents a share, excluding the charge, compared with analysts' estimates of 36 cents. It will be the fourth straight quarterly decline for the company.
The estimates from Coke "are disappointing", an analyst at Schroder said.
Mr Randy Donaldson, spokesman at Coke, conceded the company wrongly predicted the June health crisis would only hurt second-quarter earnings.
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