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. Last Updated: 07/27/2016

1998 Crisis Hits Coke Profits




Coca-Cola Co. on Wednesday reported a slim fourth-quarter loss after recording an $813 million write-down on the beverage giant's assets in Russia, the Baltics, Japan and other markets.


Coca-Cola lost $45 million, or 2 cents a diluted share, after the write-down in the three months ended Dec. 31, compared with a profit of $597 million, or 24 cents a share, in the year-earlier period.


Before the write-down, the company reported earnings per share of 31 cents in the fourth quarter, beating analysts' consensus estimate of 30 cents.


Coca-Cola Russia was forced last year to lay off staff and restructure its Moscow headquarters as it struggled to survive weak demand following the August 1998 financial crisis.


Coca-Cola sales in Russia had fallen between 60 percent and 70 percent, and Coca-Cola responded by slashing prices by 20 percent and shifting sugar imports from the West to the Commonwealth of Independent States. Coca-Cola Russia employs about 5,000 people throughout the nation.


"We are currently in a period of economic recovery in many parts of the world," Coca-Cola's new chief, Douglas Daft, said Wednesday in Atlanta.


Coca-Cola said it will cut about 6,000 more jobs from its operations worldwide, a reorganization expected to result in a pretax charge of about $800 million in 2000.


The job cuts, 2,500 of which will occur at the company's headquarters in Atlanta, will help Coca-Cola trim its annual expenses by about $300 million, the company said.