Coca-Cola warns of currency headwinds

Coca-Cola reported third-quarter revenue that fell short of expectations on Tuesday, and warned that the company is facing currency headwinds.

The beverage giant also said that it was expanding cost-cutting initiatives as carbonated beverage volumes in North America declined.

"The global macros were going to create a difficult environment," JPMorgan Chase senior analyst John Faucher told CNBC's "Squawk Box" right after the release. "It's just an incredibly difficult environment out there, and Coke isn't able to perform the they want to or the street wants them to."

The world's largest beverage maker said that net income for its third quarter ended Sept. 26 was $2.1 billion, or 48 cents a share, down from $2.4 billion, or 54 cents a share from a year earlier.

Excluding charges for refranchising some North American bottling operations and other special items, earnings per share were 53 cents.

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Coca-Cola
Carla Gottgens | Bloomberg | Getty Images

Coca-Cola's revenue decreased to $11.98 billion compared to $12.03 billion a year ago.

Coca-Cola had been expected to report earnings per share that remain unchanged from a year ago at 53 cents and revenue of $12.12 billion, according to a survey of estimates on Thompson Reuters.

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Coke said it was targeting an annual savings of $3 billion per year by 2019 through an expansion of its productivity initiatives. The company also said that it would refranchise the majority of its company-owned North American bottling territories by the end of 2017 and a substantial portion of the remaining territories no later than 2020.

"I think what we're seeing with this restructuring they're announcing is the headwinds are going to be around for a while, both company specific and industry specific, and so you have to cut costs faster," said Faucher.

The company said it expects to be below its long-term earnings per share (EPS) growth target in 2014 and, based on the current outlook, does not expect comparable currency neutral EPS growth in 2015 to be significantly different from 2014.

It also expects that fluctuations in foreign currency exchange rates to have an unfavorable impact on its 2015 results.

"From our standpoint, I think investors just need to be patient with all of these big multinationals," said Faucher. "Between FX and decelerating GDP growth, there's simply not a lot to get attracted from a fundamental standpoint right now."

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Earlier this month, the beverage giant launched Coca-Cola Life, a reduced-calorie, stevia-sweetened Coke that has 25 percent fewer calories than the regular version of the drink. Coca-Cola also revised its 2014 equity plan to emphasize "pay for performance."

The company has seen growth and unit sales slow down for several years amid a rise in health-conscious consumers and negative publicity. Earlier this month. Coca-Cola's rival Pepsi beat both earnings and revenue estimates for the third quarter and raised its full-year earnings forecast.

—CNBC's Hailey Lee and Reuters contributed to this report.