Coca-Cola adding fizz with regional products

Coca-Cola Co. is introducing a float-flavored version of Barq’s root beer in Mississippi and Louisiana, hoping to create market buzz in Barq’s home territory before risking a nationwide launch.

Coke officials, while declining to get specific, indicated they were planning more such regional product introductions this year in the ongoing battle for market share with smaller rival PepsiCo Inc.’s Pepsi-Cola division.

Launching regional products that play off the strength of an existing brand like Barq’s Floatz is less risky than costlier national launches and ad campaigns, industry analysts say.

Coke officials are calling Floatz a “treat,” not a thirst quencher. It will sell for $1.19 a bottle and $3.49 for a four-pack. It is also not geared toward the calorie conscious — each bottle has 150 calories, compared to 120 calories for a 12-ounce regular Coke.

Manufacturing

Kodak blames SARS for projected profit drop

Eastman Kodak Co., already dragged down by a nearly three-year slide in film sales, warned Wednesday that the SARS outbreak in Asia would more than halve its operating profits in the second quarter. Its shares slumped more than 10 percent.

The world’s biggest photography company said it was now projecting earnings from continuing operations of 25 cents to 35 cents a share. In April, it had forecast operating earnings in the range of 60 cents to 80 cents a share.

The latest setback could mean thousands more job cuts at Kodak, which has shed more than 10,000 employees since 2000 to offset heightened competition from Japanese rival Fuji, the rapid growth of digital photography and weak demand for film as consumers cut back on travel.

Retail

Best Buy cuts losses

Best Buy Co. Inc. reported a dramatically narrower first-quarter loss as increased consumer confidence resulted in strong revenue gains.

Best Buy, the nation’s largest consumer electronics chain, said Wednesday that the net loss for the three months ended May 31 was $25 million, or 8 cents per share. That compared with a loss of $333 million, or $1.02 a share, a year earlier, when Best Buy took a $308 million charge associated with the reduced value of Musicland and a charge of $40 million associated with its Magnolia Hi-Fi chain.

This year’s results included an impairment loss of $70 million and a loss of $24 million from discontinued operations stemming from the sale of the company’s interest in Musicland Group Inc.

Wall Street

Morgan Stanley earnings plunge during quarter

Morgan Stanley shares fell after it reported a 25 percent drop in second-quarter profits Wednesday, largely due to a $287 million charge related to its airline leasing business. Officials were cautious about the investment bank’s outlook for the rest of the year.

The nation’s second-largest securities firm earned $599 million, or 55 cents per share, for the three months ending May 31, compared with $797 million, or 72 cents a share during the same period last year.