At a recent investor conference,
Coca-Cola Enterprises Inc.
) warned that its second-quarter results could be weak, as
worse-than-expected weather conditions and operating environment
have dampened results. The share price declined sharply on
announcement of the news.
At the Deutsche Bank Global Consumer Conference in Paris, CCE
warned that cold and wet weather conditions in the second half of
May and the beginning of June have hurt volumes significantly in
this key summer selling season.
CCE, one of the largest bottlers of
The Coca Cola Company
), has been facing many other challenges lately. These include
steep price competition in Great Britain, overall soft macro
economic conditions and difficult beverage market condition in
France due to increase in French excise tax.
Some of these challenges have been more persistent than
expected, thus tempering the second-quarter results and forcing
the company to withdraw its previously provided outlook for
fiscal 2013. The company will update its outlook for the rest of
2013 when it discusses its second-quarter results on Jul 25 after
it better understands the impact of these challenges on the
At the first-quarter conference call, the company had
increased its prior guidance for fiscal 2013 earnings to reflect
accelerated share repurchase guidance. However, CCE had reduced
its expectation for revenues due to ongoing macroeconomic
challenges. Though volumes were expected to increase for full
year 2013, management had warned then that the second quarter
would be challenging in terms of volume growth. The
second-quarter adjusted currency-neutral operating income was
also expected to be flat to decline slightly despite easy
comparisons. It seems that the actual second-quarter results
would be even worse than management's already-pessimistic outlook
for the quarter.
Other Stocks to Consider
Coca-Cola Enterprises carries a Zacks Rank #3 (Hold). In the
beverage sector, stocks worth mentioning are
Dr Pepper Snapple Group Inc.
SodaStream International Ltd.
), both carrying a Zacks Rank #2 (Buy).
COCA-COLA ENTRP (CCE): Free Stock Analysis
DR PEPPER SNAPL (DPS): Free Stock Analysis
COCA COLA CO (KO): Free Stock Analysis Report
SODASTREAM INTL (SODA): Free Stock Analysis
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