ATLANTA -- Coca-Cola's chief executive yesterday said the world's largest beverage maker needs to work harder, better execute its strategy, and improve its culture as he warned that third-quarter per-share income will drop at least 24 percent from a year ago. In a speech to employees, CEO Neville Isdell said:
''We need to systematically remove the barriers that impede our progress. In my opinion, these include a lack of accountability, personal accountability, the hindrance of internal politics, an aversion to risk, and an underinvestment in developing the capability necessary to succeed."
The comments came hours after Coke temporarily shelved its policy of not giving quarterly earnings guidance and outlined its unfavorable outlook. The company's stock fell on the news.
Coke, citing poor weather in Europe and problems executing its business strategy in North America, said its reported net earnings for the July-September period will be in the range of 35 to 38 cents per share. At 38 cents, that would be a 24 percent decline from the 50 cents Coke reported in the same period in 2003.
Excluding charges, Coca-Cola said it now forecasts third-quarter earnings of 46 to 48 cents. Analysts surveyed by Thomson First Call were looking for 54 cents per share, excluding one-time items. For the second half of the year, the company expects 88 to 92 cents. Coke releases third-quarter and year-to-date earnings Oct. 21.
''I am not satisfied," said Isdell, who was named CEO in May, replacing Doug Daft. ''I understand these results to be the symptom and not the problem, and we will set about what is needed to move our business forward and improve our long-term performance."