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Coke issues 2Q warning
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June 30, 1999: 9:43 a.m. ET
Says net will be hurt because of contamination scare in Europe
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NEW YORK (CNNfn) - Coca-Cola Co. warned investors Wednesday that second-quarter earnings will be hurt in the wake of a European contamination scare that led to the biggest recall in the company's history.
Coca-Cola did not provide any specific numbers, saying only that sales were hit in Europe as a result of the temporary product withdrawal in Belgium, France, the Netherlands and Luxembourg.
"Earnings per share in the quarter will reflect the loss of sales in several key markets resulting from the European situation," the company said in a news release.
Analysts had been expecting earnings of 40 cents per diluted share for the June quarter, according to the consensus estimate reported by the First Call Corp.
Coca-Cola (KO) said that while June sales in Europe were hurt by the temporary withdrawal of its products, it does not expect an impact on sales for the remainder of the year.
"From an economic standpoint, we believe that the worst is behind us, and we remain optimistic about improving business conditions in the second half of this year and into the year 2000," said CEO M. Douglas Ivester.
The soft drink maker also said that some costs from the recall will be reimbursed through insurance.
Coke products were pulled from the shelves after more than 200 people in Belgium and France reported vomiting, stomach cramps and dizziness after consuming Coke drinks.
Coca-Cola has blamed the symptoms on poor quality carbon dioxide used to put fizz in drinks bottled in Antwerp, Belgium, and a chemical that contaminated the outside of cans at its plant in Dunkirk, France.
Coca-Cola stock was down 3/8 to 60-13/16 in early Wednesday trading.
-- staff and wire reports
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