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The world's leading soft-drink company, Coca-Cola's fountain includes everything from Coke to Poweraid, Dasani water to Snapple.
Coca-Cola to Slim Down DivisionsBy: Zacks Equity ResearchAugust 01, 2012The Coca-Cola Company (KO - Analyst Report) recently announced plans to streamline its operating structure and make certain management changes. Coca-Cola currently reports its operating results under six segments, broadly geographical, save one: Eurasia & Africa, Europe, Latin America, North America, Pacific, Bottling Investments and Corporate. Effective from January 1, 2013, the company will cut down its operating segments to three, namely Coca-Cola International, Coca-Cola Americas and Bottling Investments Group (BIG). The Coca-Cola International business will consist of the current Europe, Pacific and Eurasia & Africa segments. The Coca-Cola Americas will consist of the company’s North America and Latin America operations, and the BIG group will comprise the company-owned bottling operations outside North America. As regards the management changes, Ahmet Bozer and Steve Cahillane have been given much larger responsibilities to serve as presidents of the Coca-Cola International and Coca-Cola Americas segments, respectively. Irial Finan will continue serving as the president of the BIG group. Ahmet Bozer is currently serving as the president of the Eurasia & Africa group and Steve Cahillane is right now the president and chief executive officer of Coca-Cola Refreshments (CCR) in North America. Our Recommendation We currently have a Neutral recommendation on The Coca-Cola Company. The stock carries a Zacks #4 Rank (a short-term Sell rating). We are encouraged by the company’s global reach, strong brand power, expanding presence outside the U.S. and its solid cash position. Moreover, the company’s acquisition of Coca-Cola Enterprises’ (CCE - Analyst Report) Bottling business and its productivity initiatives are expected to result in significant cost savings. However, Coca-Cola needs to ramp up its advertising spending to match arch competitor PepsiCo Inc.’s (PEP - Analyst Report) increased focus on North American beverages. Moreover, rising costs of inputs have hurt the company’s margins.http://register.zacks.com/ucd/step1.php?ALERT=FOOL_ZER&d_alert=ZER_CONF&t=ko&ADID=FOOL_ZERFEED
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