Following two quarters of management shake-ups and stagnant case volume growth, soft drinks giant Coca-Cola has lowered its earnings estimates for its third and fourth quarters. In the face of unfavourable volume trends and other market shifts in its biggest markets, there is little sign of a quick fix for Coca-Cola.

Coca-Cola is going flat. The Atlanta-based soft drinks giant has lowered its earnings estimates for the second half of 2004. Coca-Cola re-forecast its outlook to 46-48 cents per share for its third quarter, down 15% from analysts' expected earnings of 54 cents per share. The price of Coke's shares fell to a 16-month low on the back of the announcement.

This year has been a tumultuous one for Coca-Cola. The company appointed a new CEO in May, E. Neville Isdell, and followed the announcement with a series of changes to its management team. Coke's relationship with Coca-Cola Enterprises, one of its major bottling partners, has been turbulent as well. The two companies have had troubles in the past and are in the midst of negotiations to restructure their working relationship.

Coca-Cola blamed its lowered estimates on several third quarter challenges. Unfavourable volume trends in North America bottled and canned drinks contributed to the downturn, as did an unusually wet and rainy season in western Europe. A new deposit law on beverages in Germany further affected sales. Coke's falling fortunes contrast starkly with those of its rival, PepsiCo. While Coca-Cola's stock price has fallen by 20% so far this year, the value of Pepsi's shares has increased 22%.

New images for its tried and tested brands may help the company climb out of its slump. Coca-Cola announced in early September that it would rename its popular Diet Sprite beverage to Diet Sprite Zero, changing its logo and rolling out a new marketing campaign. Yet despite these positive efforts, the company expects its challenging conditions to continue in the future. With no quick fix looming, Coca-Cola could be under a cloud for some time.