The European supplier of Coco-Cola drinks,
Coca-Cola Enterprises Inc.
), yesterday, came out with its projections for the rest of 2011
and for 2012.
Coco-Cola Enterprises expects its earnings for full year 2011 to
reach the higher end of its previously guided earnings per share (
) range of $2.14 to $2.18, reflecting a modestly improved outlook
for operating income, as well as the nominal decrease in expected
effective tax rate for 2011. The guidance includes a 15 cent per
share foreign exchange benefit.
Looking into 2012, the company continues to anticipate growth,
marking the seventh consecutive year of growth with results at or
above its long-term objectives.
The company projects 2012 earnings per share to rise 10% to 12%,
driven by solid operating income in a mid-single digit to
high-single digit range, and continued execution of its planned
share repurchase program. The Zacks Consensus EPS Estimates for
2011 and 2012 are $2.16 and $2.37, respectively.
Coca-Cola Enterprises expects to see a mid-single digit range
increase in its 2011 revenue, with operating income growth expected
to be in the high single digit range. For 2012, the company
anticipates revenue growth in the mid to high-single-digit
However, the company expects to see a modest pull back in its
2011 gross margins while operating margins are expected to be up
modestly, comparable to 2010 margins.
Coca-Cola Enterprises' effective tax rate for 2011 continues to
be expected in the range of 26% to 27%, while the tax rate for 2012
is expected to be in the range of 26% to 28%.
Additionally, the company expects to end 2011 with strong free
cash flows of roughly $525 million, with capital expenditures of
approximately $375 million. The company expects to generate free
cash flows of nearly $550 million in 2012 with capital expenditures
of $400 million.
This positive outlook, coupled with the company's strong balance
sheet and ability to grow the business enables the company to
return significant cash to shareowners through dividends and share
As a result, Coca-Cola Enterprises has outlined its plans to buy
back nearly $500 million worth of stock in 2012 following the
completion of its $1 billion repurchase plan in 2011.
Coca-Cola Enterprises said its outlook for 2011 and 2012 is
guided by the solid operating and marketing plans that are centered
on maximizing the benefits of key significant initiatives,
including the London Olympics and Euro 2012 Soccer. The company
also pointed out that the Olympic and Euro 2012 events would
supplement its longstanding programs for business promotion.
Coke with Food is an ongoing effort, which helps expand the
overall footprint of the brands. These programs create a very solid
platform from which to engage consumers and continue to grow
To summarize, the company continues to make excellent progress
in building its business and creating a sustained level of
increasing profitability. Its success has been driven by a
combination of operating and marketing strategies built on its
brand value and its maximized operating efficiency.
Comprising of legacy European bottling operations and the
bottling operations acquired from
The Coca-Cola Company
) in Norway and Sweden, Coca-Cola Enterprises currently holds a
Zacks #2 Rank, which translates into a short-term Buy rating. On a
long-term basis, however, we maintain a Neutral rating on the
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