Coca-Cola Enterprises Beats on Increased Sales

Oct.28.10 | About: Coca-Cola Enterprises (CCE)

Coca-Cola Enterprises Inc. (CCE) recorded earnings per share of 58 cents a share (including results from Norway and Sweden), which topped the Zacks Consensus Estimate of 54 cents. Prior-year quarter earnings were 50 cents.

Results for the reported quarter include Norway and Sweden while excluding the Coca Cola Enterprises, North American operation, post divestiture. Results for the prior-year comparable quarter, however, exclude Norway and Sweden and include the North American operation.

In February, Coca-Cola Enterprise, in collaboration with the beverage giant Coca-Cola Company (KO), broached a deal, which involved the acquisition of the entire North American business of the bottler by Coca-Cola. Coca-Cola Enterprises is now a newly registered company comprising CCE’s legacy European bottling operations, and the bottling operations in Norway and Sweden acquired from The Coca-Cola Company.

During the quarter, Coca-Cola Enterprises’ sales increased 3.5% to $1,681.0 million from $1,743.0 million in the year-ago period. Including revenue from Norway and Sweden, total revenue came in at $2,030.0 million.

Gross profit for the quarter dipped 3.5% to $650 million from $674 million recorded in the year-ago quarter. Including Norway and Sweden results, gross profit came in at $759.0 million. Operating income for the quarter increased 1.3% to $676.0 million.

North American Results (Discontinued Operations)
The North American bottling business delivered a year-over-year growth in revenues of 2.0%, driven by a 2.5% growth in volumes.

Balance Sheet and Cash Flow
Coca-Cola Enterprises exited the quarter with cash and cash equivalents of $476 million, compared with $945 million in the year-ago period. Year-to-date, the company generated $620 million of cash from operations and deployed $185 million toward capital expenditure.

Fiscal 2010 Guidance
Bolstered by the better-than-expected quarterly performance, Coca-Cola Enterprises expects full-year 2010 adjusted earnings in a range of $1.74 to $1.78 per share on the back of pro forma revenue of $7.4 billion.

The company also plans to buy back approximately $1 billion of its common stock within the next 18 months. This program is expected to begin during the fourth quarter of fiscal 2010.

Long-Term Objective
In the long term, the company expects to achieve revenue growth of 4% to 6%, operating income expansion of 6% to 8% and a high single-digit growth in earnings per share.