Coca-Cola Enterprises Inc. (CCE) in a business update reaffirmed its fiscal 2011 guidance and targets for the long term while also announcing its share repurchase plan.
Coca Cola Enterprises reaffirms that it will continue to expect to earn in the range of $2.10 to $2.15 in fiscal 2011, including an estimated currency gain of about 15 cents, which is based on recent rates. The company expects the top line to grow in the range of mid single-digit.
The company expects cost of goods sold to increase by 3% while gross margin is expected to be essentially flat for the year. On the back of top-line growth, the company expects operating income growth to be in the range of mid-single-digit to high-single-digit. Operating margins are estimated to be flat to up moderately for the full year.
The company expects to generate a free cash flow of approximately $475 to $500 million and estimates to incur capital expenditures of approximately $400 million.
For the long term, the company expects top-line growth of 4% to 6% with operating income growth of 6% to 8%. Coca Cola Enterprises expects earnings to increase in high single-digit range. Moreover, the company expects annual capital expenditures to be approximately 5% of total revenue.
With an intention to boost the shareholders worth, the company announced a share repurchase of $1 billion. The company plans to repurchase $500 million in 2012.
Coca-Cola Enterprises recently posted second-quarter 2011 adjusted earnings of 76 cents per share, outpacing the Zacks Consensus Estimate of 74 cents. This also compares favorably with earnings of 66 cents in the year-ago quarter. A solid volume growth coupled with price increases led Coca-Cola Enterprises to deliver better-than-expected quarterly result
Coca-Cola Enterprises, which competes with Kraft Foods Inc. (KFT) and PepsiCo Inc. (PEP), currently has a Zacks #2 Rank, implying a short-term Buy rating. Moreover, we maintain a long-term Neutral recommendation on the stock.
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