Higher prices dent Coca-Cola demand, forecast underwhelms

(Reuters) - Coca-Cola Co forecast full-year profit well below Wall Street expectations on Thursday and posted a drop in soda sales for the fourth quarter as price increases in North America crimped demand, sending its shares down 3 percent.

Coca-Cola and rival PepsiCo Inc are wrestling with rising freight and commodity costs even as they spend heavily on building a portfolio of non-carbonated drinks to attract health-conscious consumers.

To counter the rising costs, Coca-Cola has raised prices of its beverages. But that has come at the expense of demand - volumes fell 1 percent in North America in the fourth quarter, while Latin America was down 2 percent.

Coca-Cola forecast full-year profit to be between $2.06 and $2.10 per share, far below the average expectation of $2.23, blaming a stronger dollar.

Net income attributable to the company's shareholders was $870 million in the quarter ended Dec. 31, compared a loss of $2.75 billion, a year earlier when the company took a tax-related charge.

Excluding one-time items, Coca-Cola said it earned 43 cents per share, in line with expectations.

Revenue fell 6 percent to $7.1 billion in the fourth quarter, hurt by the refranchising of its low-margin bottling operations. Analysts had estimated sales of $7.03 billion, according to IBES data from Refinitiv.

The company's shares were down 3.3 percent at $48.13. This year, Coke shares have gained 5 percent, compared with a 3 percent rise for PepsiCo, which will report results on Friday.

(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Saumyadeb Chakrabarty)