Coca-Cola Enterprises Inc
) reported first-quarter 2014 adjusted earnings of 46 cents per
share, beating the Zacks Consensus Estimate of 44 cents by 4.5%
and the year-ago earnings of 39 cents by 17.9% driven by expense
control initiatives. Currency also favorably impacted first
quarter earnings by 3 cents.
During the quarter, net sales grew 1.0% year over year to
$1.87 billion but fell short of the Zacks Consensus Estimate of
$1.93 billion by 3.0%. Excluding currency translations, revenues
declined 2.5% due to decline in volumes.
Volumes plummeted 1.5% in the quarter, as against 2.5% growth
in the preceding quarter, mainly due to a decline in volumes in
Great Britain. A combination of operating strategies including
disciplined pricing under competitive conditions, the transition
in packaging from 2-liter PET bottles to 1.75-liter PET bottles
and wet weather conditions, led to a 9% decline in volumes in
Great Britain. However, volumes grew 3.5% in continental Europe,
led by strong growth of Coca-Cola trademark beverages and
mid-single digit growth in still brands.
Net pricing per case increased 1.0%, while cost of sales per
case was flat in the quarter. Total cost of sales was $1.2
billion in the reported quarter.
Adjusted operating income grew 7.8% on a currency neutral
basis to $194 million owing to a 3.5% decline in operating
In Dec 2013, the board of Coca-Cola Enterprises, the western
European bottler of
The Coca-Cola Company
), authorized a new $1 billion share repurchase program, the
fourth buyback program since the company's inception in 2010. The
company expects to buy back $800 million worth of shares by the
end of 2014.
The company maintained its 2014 guidance. In 2014, adjusted
earnings are expected to increase approximately 10% in constant
currency terms. In addition, according to recent rates, currency
is now expected to benefit 2014 earnings per share by over 5%, up
from the prior expectation of 3%-4%.
While adjusted constant currency net sales are expected to
grow in the low single-digit range, operating income is expected
to grow in the mid single-digit range.
Coca-Cola Enterprises now expects free cash flow for full-year
2014 to be $650 million, at the high end of the prior guidance of
$600 million-$650 million. Capital expenditures are still
expected to be approximately $350 million. The company expects
the weighted average cost of debt to be around 3%. Effective tax
rate is expected in a range of 26% to 28%.
Coca-Cola Enterprises carries a Zacks Rank #2 (Buy). Other
beverage stocks worth considering include
Monster Beverage Corporation
), both holding a Zacks Rank #2.
COCA-COLA ENTRP (CCE): Free Stock Analysis
COCA COLA CO (KO): Free Stock Analysis Report
MONSTER BEVERAG (MNST): Free Stock Analysis
PEPSICO INC (PEP): Free Stock Analysis Report
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