Coca-Cola Co. ( KO ) on Tuesday lowered its volume growth outlook for the year to a level widely anticipated by Wall Street, and said it remains confident it will meet its earnings target for the year despite a slowdown in U.S. growth rates since the recent attacks. 
Atlanta-based Coca-Cola, the world's top soft drink company, cut its full-year forecast for unit case volume growth to 4 percent to 5 percent from a previous target of 5 percent to 6 percent growth. Unit case volume is a key measure of financial health in the soft-drink industry. 
"The Street didn't expect 5 to 6 (percent volume growth). The street very much had the 4 to 5 view, so that's why the stock is doing well," said ABN Amro beverage analyst Mark Swartzberg. "In this atmosphere, a company doing what the Street expects is clearly a good thing." 
Shares of Coca-Cola edged up 2 cents to $48.03 in late afternoon trade on the New York Stock Exchange after climbing as high as $49.26 earlier in the session. 
"Even though the underlying fundamental strengths of our business have not changed, caution dictates that we closely monitor the increased uncertainty in macroeconomic conditions," Chairman and Chief Executive Doug Daft said in a statement. "Not surprisingly, following the tragic events of Sept. 11, we have experienced lower growth rates in the United States." 
UBS Warburg beverage analyst Caroline Levy said it was "kind of surprising" that Coke said U.S. sales had shown a reaction to the recent events. "I would have expected them to say 'because we slowed advertising we've had a short term effect' or something like that. You just don't expect soft drinks to be economically sensitive, you really don't." 
Coke also said it expects its unit case volume to grow by about 3 percent in North America for the quarter, also in line with earlier views from analysts. 
The company said it sees third-quarter unit case volume up 3 percent to 4 percent in both its Latin America and Europe, Eurasia and Middle East regions. The company also said it sees third-quarter volume jumping 8 percent to 9 percent in Africa and 7 percent to 8 percent in Asia. 
Coke's full-year volume outlook was met with satisfaction from analysts. On Monday, Levy trimmed her 2001 volume estimate to 3.6 percent, down from over 4 percent, due in part to the economic slowdown. She said a U.S. recession "could cause slowdowns" for Coke in Latin America and other regions. 
On Tuesday, Levy said there was a good chance Coke will come in at the low end of its 4 percent to 5 percent range. 
Analysts currently expect Coca-Cola to earn 37 cents to 44 cents per share for the third quarter, with a consensus view of 40 cents per share, compared with a profit of 42 cents per share in the year-ago quarter, according to Thomson Financial/First Call. For the fourth quarter, analysts call for Coke to earn 34 cents to 41 cents per share, with a consensus estimate of 40 cents, compared with last year's fourth-quarter profit of 38 cents. 
Looking at the full year, analysts call for Coke to earn $1.53 to $1.65 per share, with a consensus view of $1.57, up from last year's full-year earnings of $1.44 per share. 
ABN Amro's Swartzberg said Coke's business is accelerating as the company continues to revamp its management and advertising. "We're seeing that start to pay off, but it's not happening at the pace that Coke thought it would," he said. 
The company did not comment on its outlook for 2002. 
"I think their verbiage was kind of cautious," said Levy. "They said obviously they're monitoring the global environment, so I think they left a window there to certainly at least adjust 2002 estimates." 
