Coca-Cola Enterprises Inc.
) third-quarter 2013 adjusted earnings of 82 cents per share beat
the Zacks Consensus Estimate of 80 cents by 2.5% and the year-ago
earnings of 71 cents by 15.5%. Favorable impact of 2 cents per
share from currency translation, decline in operational expenses
and lower share count led to year-over-year growth in
Revenues and Margins
During the quarter, on a currency-neutral basis, net sales
grew about 2.5% year over year (up 5% on a reported basis) to
$2.17 billion and came in line with the Zacks Consensus Estimate.
Sales in the quarter were positively impacted by favorable
weather conditions and continued marketing initiatives,
especially the 'Share a Coke' campaign.
Coca-Cola Enterprises, one of the largest bottlers of
The Coca Cola Co.
), has been facing some challenges in the recent times. These
include steep price competition in Great Britain and overall soft
macro economic conditions. However, some of these challenges
seemed to have taken a breather with volume in Great Britain
growing 3% and 2.5% in continental Europe.
The company's net pricing per case nudged up 0.5% whereas cost
of sales per case increased 2.5% in the quarter. Overall, volumes
(bottle and cans) grew 2.5% in the quarter. Sparkling drinks
volume grew about 4% with beverages from Coca Cola increasing 5%.
While Coca Cola Zero managed to post growth of as much as 23%,
Coca Cola volumes improved a moderate 4%. Also, energy drinks
volume grew 15% helped by Monster and Relentless brands.
Volume for Still beverages declined 5%, with water falling 6%.
The decline came in stark contrast to 21% growth registered in
the year-ago period.
Comparable operating income grew 4.5% owing to the continuing
expense control initiatives.
Coca-Cola Enterprises began its third share repurchase program
worth $1.5 billion in Jan 2013. The company expects to repurchase
shares worth at least $1 billion during 2013.
Full Year Outlook
Coca-Cola Enterprises expects its adjusted earnings per share
to remain in the upper half of the previously guided range $2.45
to $2.50. The guidance includes a 1.5% positive impact of
currency translation at current rates.
The company continues to expect net sales to grow in the low
single-digit range. Operating income is expected to increase in
the low-single digits range.
Coca-Cola Enterprises expects free cash flow for full year
2013 to be around $500 million after adjusting increase in cash
restructuring expenses in a range of $100 million to $125
million. Capital expenditure is expected to be in the range of
$300--$325 million as against the prior guidance of $325 million.
The company expects the weighted average cost of debt to be
around 3% and effective tax rate to be in the range of 26% to
Coca-Cola Enterprises carries a Zacks Rank #2 (Buy). Some
other consumer staples stocks that are worth a look include
Inventure Foods, Inc.
Pinnacle Foods Inc.
) both carrying a Zacks Rank #2.
COCA-COLA ENTRP (CCE): Free Stock Analysis
COCA COLA CO (KO): Free Stock Analysis Report
PINNACLE FOODS (PF): Free Stock Analysis
INVENTURE FOODS (SNAK): Free Stock Analysis
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