Sometimes defensive stocks can see troubles just like other companies due to bad news headlines. While the news is not hurting the shares, Coca-Cola Co. (NYSE: KO) has outlined some exposure it has to the Covid-19 novel coronavirus. China cannot be ignored as an important part of the beverage giant’s business as China is its third-largest market in the world in terms of unit case volumes.

At the Consumer Analyst Group of New York Conference, Coca-Cola reaffirmed its full-year guidance, but it did outline some of what it expects as a result of Covid-19 weighing on the company’s current quarter. Coca-Cola noted that it sees great opportunities in China and it plans to continue investing for long-term growth there.

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As this outbreak continues to evolve, the impact being represented is likely preliminary, as the company said in this release that it expects to provide more information during its next earnings call in April. The guidance comments were as follows:

The company currently estimates an approximate 2- to 3-point impact to unit case volume, 1- to 2-point impact to organic revenue and 1- to 2-penny impact to earnings per share for the first quarter. Based on its latest forecasts, the company still expects to achieve its previously provided full year guidance.

On top of donating to efforts and working locally, Coca-Cola also pointed to a high priority around the safety and health of its associates:

The company has implemented precautionary measures to protect employees in China, which includes providing face masks and hand sanitizers; installing temperature screening in offices and manufacturing facilities; and setting up health monitoring mechanisms across the Coca-Cola system in China.

On January 30, 2020, Coca-Cola issued its fourth-quarter 2019 earnings and gave its preliminary outlook for the current year. At that time, the company’s release indicated that it was unable to reconcile full-year 2020 projected organic revenues to full-year 2020 projected reported net revenues and other financial comparisons because of foreign currency exchange rates, the timing and amount of acquisitions, divestitures or structural changes and other data. Its entire earnings release did not even contain the word “coronavirus.” The report said:

The company expects to deliver approximately 5% growth in organic revenues (non-GAAP) and approximately 8% growth in comparable currency neutral operating income (non-GAAP). … For comparable net revenues (non-GAAP), the company expects a slight tailwind from acquisitions, divestitures and structural items and a 0% to 1% currency headwind based on the current rates and including the impact of hedged positions. … For comparable operating income (non-GAAP), the company expects an immaterial impact from acquisitions, divestitures and structural items and a 2% to 3% currency headwind based on the current rates and including the impact of hedged positions. … Given the above considerations, the company expects to deliver comparable EPS (non-GAAP) of approximately $2.25 versus $2.11 in 2019, a 7% increase. … The company expects to deliver free cash flow (non-GAAP) of approximately $8.0 billion through cash from operations of approximately $10.0 billion and capital expenditures of approximately $2.0 billion.

While the headlines indicated that this was a warning, the market is dusting this aside as temporary and not as a major concern, considering that it could have been worse. Coca-Cola stock traded up about 30 cents at $60.03 in the noon hour. That is very near its all-time high of $60.07. The Refinitiv consensus analyst target price for Coca-Cola is $63.50.

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