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Coca-Cola Enterprises Beats on Q2 Earnings, Sales Fall Y/Y - Analyst Blog

Coca-Cola Enterprises Inc.'sCCE second-quarter 2015 adjusted earnings of 79 cents per share beat the Zacks Consensus Estimate of 76 cents by 4%. However, earnings fell 12.2% year over year from the prior-year figure of 90 cents. Currency had a negative impact of 18 cents on adjusted earnings.

Adjusted earnings exclude the impact of restructuring costs, mark-to-market effects, and other items. Including these charges, earnings stood at 75 cents per share.

Coca-Cola Enterprises Inc. - Earnings Surprise | FindTheBest

Revenues

During the quarter, net sales declined 17.5% year over year to $1.93 billion but were ahead of the Zacks Consensus Estimate of $1.90 billion by 1.6%. On a currency neutral basis, net sales were down 2%.

Ongoing macroeconomic softness in Europe and a challenging retail environment in key markets like Great Britain have been primarily hurting sales.

The company's cost of sales per case declined 3%, which compared favorably to the decline of 2.5% in the prior-year quarter. Adjusted operating income plunged 15% to $289 million. On a currency neutral basis, adjusted operating income grew 2%.

Volume & Pricing Update

Volumes decreased 1%, owing to challenging retail environment in the quarter and strong year-over-year comparison.

Volumes declined 1% in Great Britain and continental Europe.

Volumes of sparkling beverage decreased 2.5%. The energy portfolio increased more than 15% driven by Monster. Volumes of still beverages rose 7% driven by Capri-Sun and the launch of smartwater in Great Britain.

Net pricing per case declined 1%, which compared favorably to the 2% decline in the previous quarter.

Adjusted operating margin was $289 million, down 15% year over year. However, on a currency neutral basis, adjusted operating margin was up 2%.

2015 Outlook

Coca-Cola Enterprises reaffirmed its full-year guidance for 2015. On a comparable and currency neutral basis, management expects 2015 adjusted earnings per share to grow in the range of 6% to 8%. Currency translation is expected to hurt earnings per share by 18%, higher than the prior expectation of 16%.

On a comparable and currency neutral basis, net sales and operating income are expected to be slightly positive. The company expects free cash flow in the range of $600 million to $650 million for 2015.

Coca-Cola Enterprises carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some stocks in the beverage industry worth considering include Cott Corporation COT , and Dr Pepper Snapple Group, Inc. DPS . While Cott Corporation sports a Zacks Rank #1 (Strong Buy), Dr Pepper Snapple Group and Monster Beverage Corporation MNST carries a Zacks Rank #2 (Buy).

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COCA-COLA ENTRP (CCE): Free Stock Analysis Report

DR PEPPER SNAPL (DPS): Free Stock Analysis Report

MONSTER BEVERAG (MNST): Free Stock Analysis Report

COTT CORP QUE (COT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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