Coca-Cola Enterprises 4th-quarter net down 11% on weaker volume
2013-02-08 10:48:30
Coca-Cola Enterprises Inc.'s (CCE) fourth-quarter earnings fell 11% as the European bottler saw volume and margins contract, though revenue grew.
For the new year, the company forecast per-share earnings would rise 10%, with sales growing in a mid-single digit range. Analysts polled by Thomson Reuters have expected 12% per-share earnings growth and 5% sales growth.
Coca-Cola Enterprises, which was spun out of Coca-Cola Co. (KO) in 1986 to consolidate many independent bottling groups, sold its North American operations to Coca-Cola in 2010.
The company has warned that Western Europe's economic woes pose a threat to demand for its soft drinks. The bottler also has grappled with higher taxes in France, aggressive competitive spending in the U.K. and the negative impact of currency translation.
Amid these challenges, Coca-Cola Enterprises is pursuing a restructuring effort, focusing on its finance back-office functions and go-to-market model, in an effort to generate about $100 million in ongoing benefits by 2015.
Meanwhile, the company undertook some shareholder-friendly actions in recent months, as its board approved a 25% dividend increase and a $1.5 billion share buyback.
Coca-Cola Enterprises reported a profit of $100 million, or 34 cents a share, down from $113 million, or 36 cents a share, a year earlier. Excluding items such as mark-to-market restructuring charges and tax impacts, earnings rose to 45 cents in the latest quarter.
Sales grew 1.2% to $1.92 billion and were up about 2% on a currency neutral basis.
Analysts polled by Thomson Reuters had most recently forecast per-share earnings of 44 cents on revenue of $1.92 billion.
Gross margin narrowed to 34.6% from 35.2%.
Volume shrank 5.5%, driven by ongoing challenging conditions and cycling strong growth in the prior year, the company said. Volume in continental Europe declined 5.5%, and volume in Great Britain declined 6%. Net pricing per case was up 4% and cost of sales per case rose 3.5%.
Shares closed Wednesday at $34.90 and were inactive premarket. The stock is up 15% over the past three months.