NEW YORK -- Coca-Cola said it plans to slash costs by $3 billion a year after the world's biggest beverage maker reported disappointing sales on flat soda volume.
The Atlanta-based company said it will reach its cost-cutting goal by 2019 through a variety of measures, such as restructuring its global supply chain. The maker of drinks including Powerade, Sprite and Diet Coke said the savings will help fund the marketing that's needed to drive up sales.
As sales of their drinks have slowed, Coca-Cola (KO) and rival PepsiCo (PEP) have both sought to improve their financial performance by trimming costs. In the U.S., they're also trying to boost sales by pushing "mini-cans" that are positioned as a way to control portions.
For the quarter ended Sept. 26, Coca-Cola said global beverage volume rose 1 percent, as an increase in non-carbonated drinks lifted soda volume. In its flagship North American market, the company said soda and non-carbonated drinks each fell by 1 percent.
Earlier this month, PepsiCo said soda volume for the region fell 1.5 percent for the quarter, while non-carbonated drinks rose slightly.
Although Coca-Cola and PepsiCo sell a variety of other drinks, both are trying to figure out how to turnaround their flagship soda businesses. Americans have been cutting back on soft drinks over the past decade, in part because of concerns about sugar. More recently, executives have blamed concerns about the artificial sweeteners for even steeper declines in diet sodas.
In the latest quarter, Coca-Cola said its focus on smaller sizes helped lift revenue for North America, even though volume declined.
Coca-Cola is also increasingly looking elsewhere for growth, and has acquired stakes in single-serve coffee maker Keurig Green Mountain and energy drink maker Monster Beverage.
Coca-Cola said profit nevertheless fell 14 percent, dragged down by unfavorable currency exchange rates. The company said it expects this year's earnings per share to miss its long-term target of high-single-digit growth. It also lowered the low end of its long-term revenue target, and its stock tumbled more than 6 percent.
Coca-Cola Co. said it earned $2.11 billion, or 48 cents a share. Adjusted for one-time items, it earned 53 cents a share, topping the 52 cents a share analysts expected, according to Zacks Investment Research.
Revenue was $11.98 billion, which missed Street forecasts for $12.14 billion.
Coca-Cola's shares fell $2.43, or 5.6 percent, to $40.86.