Coca-Cola Enterprises Inc (CCE: Quote), Europe's largest bottler of Coca-Cola Co. (KO) beverages, Monday said profit declined in the second quarter, as revenues declined amid lower volume and currency challenges. Adjusted earnings met Wall Street view, but revenue missed estimates. The company expects the strong U.S. dollar to hurt full-year earnings.
John Brock, CEO, said, ''As we face a unique combination of unfavorable weather and ongoing marketplace challenges, we continue to closely manage each element of the business to drive results and deliver against our objectives."
CCE expects comparable earnings per share in a range of $2.18 to $2.24 for 2012, including the negative impact of currency translation. Based on recent rates, currency translation would decrease full-year earnings per share by 10 percent and reduce third-quarter earnings per share by 12 percent.
Net sales are expected to grow in a mid-single-digit range. The forecast includes the impact of the French excise tax increase and is comparable.
Wall Street looks for full year earnings of $2.24 per share on revenues of $8.29 billion.
Earlier, the company had expected earnings per share growth of approximately 10 percent and revenue increase in a high single-digit range.
Net income declined to $205 million from $246 million. Earnings per share fell to $0.67 from $0.74.
Excluding mark-to-market effects and restructuring charges, earnings declined to $0.73 per share from $0.76 per share. On average, 11 analysts polled by Thomson Reuters expected earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter reduced to $2.21 billion from $2.41 billion, but fell short of Wall Street view of $2.27 billion. Sales were flat on a currency neutral basis, and slid 2 percent on a currency neutral basis excluding the impact of the French excise tax increase.
Volume declined 6 percent due to unfavorable weather, the French excise tax increase, and last year's growth hurdles. Declines were consistent in both the sparkling and still categories. Energy increased 16 percent and Coke Zero grew 2.5 percent.
Total volume in Great Britain declined 4.5 percent, while volume in continental Europe declined 7 percent. Net pricing per case grew 6.5 percent and cost of sales per case grew 6.5 percent, including the impact of the French excise tax increase.
CCE began a new $1 billion share repurchase program in January and repurchased $225 million of its shares in the second quarter. CCE now expects to repurchase at least $600 million of its shares by the end of 2012.
CCE closed on Friday lower by over 2 percent at $26.84.
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by RTT Staff Writer
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