Bottles of Coca-Cola soft drinks are on a shelf in the shop in Arlington, Virginia, on August 17, 2009.
Credit: Reuters/Jim YoungBy Phil wahbaNEW YORK | Tue 6: 37 pm EDT on April 26, 2011
NEW YORK (Reuters) - Japan disaster and later have a reduction in sales and earnings of U.S. companies that serve to Japanese consumers, Coca Cola (KO).(N) to Coach Inc (COH).(N) and 3 M co. (MMM).(N), while buyers are showing some resistance.
Japan, the third world economy, stagnated economically before March 11 earthquake and the tsunami, but it remains an important market for many businesses, especially manufacturers of consumer products and chains.
Coach, known for his fantasy leather handbags, generates almost one fifth of its sales in Japan. After the earthquake of the month past and nuclear disaster could reduce current quarter earnings by 2 to 3 cents per share, approximately 5 percent of the profits on Wall Street forecast.
Coke results disappointed Wall Street in part due to the loss of income in Japan. The soft drinks manufacturer said disruptions in their supply chain are hampering the ability of bottlers produce drinks in time for the summer.
"In general, I think that the supply chain is still highlighted in Japan in terms of being able to supply the market," Coke CEO Muhtar Kent told analysts in a conference call.
Coke said that the events could reduce the earnings per share by another 2 to 4 cents this year. Wall Street expected earnings of $3.01 Coke per share in the remaining three quarters of the year, according to Thomson Reuters / B/E/S.
"I think that there will be a period of time where I think that people will have a greater demand for packaged drinks," Kent told Reuters in an interview. He said than expected sales of coca cola in Japan to normalize in the fourth quarter after gaining success in the second and third quarter.
Other companies are seeing signs of a rebound, or have the advantage of growth elsewhere to compensate for any drop in Japan.
Sales of luxury in Japan goods to recover to levels seen before the crisis, Christian Dior (DIOR).(PA) CEO Sidney Toledano told Reuters on Tuesday.
Amazon.com (AMZN).(O) Chief Financial Officer Thomas Szkutak Tuesday to journalists that the disasters of Japan hit the international sales growth by 5 percentage points.
Szkutak said outside United States sales growth would have been 32 percent in the first quarter instead of 27 per cent had it not been for the Japanese earthquake. But he said, business has stabilized.
Reach early buyers can help boost sales in the long term. Stores of Wal-Mart Inc (WMT).(N) has water imported from the shipping of food and other goods of the United States and Canada to meet the demand in more than 400 stores.
"That really help Japan client to retrieve at a time like this", Wal-Mart, President and Chief Executive Mike Duke said in a Conference of Barclays on Tuesday.
Wal-Mart has reopened all but about five Japanese stores and its distribution network can be executed. Efforts of Wal-Mart should translate into more force in Japan on a base in the long term, said Duke.
INDUSTRIAL PRESSURE
The companies that produce relatively few goods sold directly to the people in Japan are feeling the impact as Japanese manufacturing output has been successful.
Conglomerate 3 M has greater exposure to Japan that the majority of their industrial peers, with 9 percent of its sales generated there.
The company sells automatic and electronic companies in Japan that have experienced interruptions in production since the disaster of March.
3 M, the manufacturer of the tape, notes Post-It, abrasive industrial and health care products and electronics, said that the crisis of Japan cut earnings in the first quarter by about 3 cents per share and will reduce the year earnings by 10 cents to 13 cents to share.
Wall Street analysts expect an annual profit of $6.22 per share.
Delta Air Lines Inc. (DAL).(N) expected to lose around 75 million dollars in Japanese business in the current quarter.
Forecasts of benefit reduced coach, coke and 3 M Tuesday echoed the last weeks of the jewelry Tiffany & Co (TIF).(N) and clothing store chain Gap Inc (GPS).(N), that still get most of its sales in Asia in Japan while rapid eye China's growth.
However, for all the disruption, the damage is has relatively contained.
"We do not see any harm in the long term". In fact our business has recovered in our places of full price, "coach CEO Lew Frankfort told Reuters." "We believe that Japan back to normal."
(Other reports by martinne Geller and Nick Zieminski in New York, karen jacobs in Atlanta, Jessica wohl in Chicago and Lisa baertlein in Los Angeles.) (Edited by Robert MacMillan, Gary hill and Steve Orlofsky)
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