Analysts expected Atlanta-based Coca-Cola to earn 54 cents per share in the second half of 2004 but the company has lowered this estimate to between 46 and 48 cents per share for at least the third quarter.
The company's share price has now dropped by 20 per cent this year, a trend Neville Isdell, appointed as chairman and chief executive officer in May, is extremely disappointed about, and anxious to halt.
"While the retail environment is difficult, we have not reacted as quickly or as effectively as I would like," said Isdell who wants Coca-Cola to adapt quicker to retail and consumer trends.
The company has also blamed unusually poor summer weather conditions in northern Europe for knocking the company's profits off course, along with "unfavourable volume trends in the North America bottle and can business".
There has been upheaval at high levels within Coca-Cola too. Isdell's appointment came as the precursor to a series of management team changes and there has reportedly been a troubled working relationship between the company and one of its major bottling partners, Coca-Cola Enterprises.
The drop in Coca-Cola's fortunes is contrasted with the rise of arch-rival PepsiCo, whose share price has risen by 22 per cent so far this year.
Coca-Cola has already tried to stem the tide by introducing a new image for its popular Diet Sprite drink, changing the name to Diet Sprite Zero and launching the drink under a new logo in early September.
Isdell said: "I came back to lead a growth business. I believe this is still a growth Company and my intention is to put it back on track. With strong brand equity, cash flow and market position, I am confident that no other company is better positioned to capture growth in the beverage category than The Coca-Cola Company."
The company will announce its third quarter, 2004 financial results on Thursday 21st October after the stock market closes business for the day.