On Jun 12, we issued an updated research report on
Coca-Cola Enterprises Inc.
On Apr 24, Coca-Cola Enterprises announced mixed first-quarter
2014 results. Adjusted earnings of 46 cents per share beat the
Zacks Consensus Estimate by 4.5%. Earnings increased 17.9% over the
prior-year quarter driven by cost control and favorable currency
benefits. Revenues, in contrast, fell short of the Zacks Consensus
Estimate but grew only 1% year over year due to volumes declines,
mainly in Great Britain. However, margins improved once again due
to lower operating expenses.
More than 90% of the sales volume of Coca-Cola Enterprises
The Coca-Cola Company
) products. In Oct 2012, Coca-Cola Enterprises sold its North
American operations to The Coca-Cola Company and took over the
latter's bottling operations in Norway and Sweden.
Coca-Cola Enterprises is thus, geographically focused in Western
Europe and is exposed to the economic uncertainties of this
Coca-Cola Enterprises has been facing many operating and
marketplace challenges lately. These include steep price
competition in Great Britain, overall soft macroeconomic conditions
and difficult beverage market conditions in France due to increase
in French excise tax. Management believes that these challenges
will persist, making growth in 2014 uncertain.
However, the company enjoys strong fundamentals including a
strong brand portfolio, solid share buyback program and aggressive
cost cutting initiatives. However, with the ongoing macro pressure
in Europe affecting sales, the company is forced to drive profit
only through cost cutting and share repurchases. Though economic
conditions have improved somewhat in European countries, a
sustained improvement in volumes is necessary.
Other Stocks to Consider
Coca-Cola Enterprises carries a Zacks Rank #3 (Hold).
Better-ranked beverage stocks include
The WhiteWave Foods Company
Dr Pepper Snapple Group, Inc.
). Both the companies carry a Zacks Rank #2 (Buy).
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COCA-COLA ENTRP (CCE): Free Stock Analysis
COCA COLA CO (KO): Free Stock Analysis Report
DR PEPPER SNAPL (DPS): Free Stock Analysis
WHITEWAVE FOODS (WWAV): Free Stock Analysis
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