Coca-Cola Enterprises Inc.'s (CCE) second-quarter 2011 adjusted earnings of 76 cents per share outpaced 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.
The results for the reported quarter include operations of Norway and Sweden but exclude the North American operation of the company. During the fourth quarter of 2010, Coca-Cola Enterprise divested its North American bottling business to the beverage giant The Coca-Cola Company (KO).
Coca-Cola Enterprises is at present a newly registered company comprising its legacy European bottling operations and the bottling operations acquired from the Coca-Cola Company in Norway and Sweden.
Quarterly Details
During the second quarter, Coca-Cola Enterprises' sales increased 21.8% to $2,407.0 million on a comparable basis from $1,976.0 million in the year-ago period. The sales increase was attributable to a rise of 4.5% in volume in all territories, followed by a surge of 3.0% in product prices. Revenue beats the Zacks Consensus Estimate of $2,286.0 million.
Gross profit for the quarter increased 19.0% to $893.0 million on a comparable basis from $750.0 million recorded in the year-ago quarter. Operating income also inched up 21.5% to $368.0 million from $303.0 million recorded in the year-ago quarter.
Moreover, Coca-Cola Enterprises' operating margin remains flat year over year at 15.3% in the reported quarter as the benefits from volume and pricing growth were fully offset by increased cost of sales and operating expenses.
Balance Sheet, Cash Flow and Dividend
Coca-Cola Enterprises exited the quarter with cash and cash equivalents of $404.0 million. As of July 01, 2011, the company generated $256.0 million of cash from operations and deployed $181.0 million toward capital expenditure.
Earlier, on July 26, 2011, the board of directors of Coca Cola Enterprises declared a quarterly dividend of 13 cents per share. The dividend will be paid on September 22, 2011 to shareholders of record as of September 09, 2011.
Share Repurchase
During the reported quarter, Coca-Cola Enterprises repurchased $200.0 million of shares under its $1.0 billion share repurchase program, started in the fourth quarter of fiscal 2010. Since the announcement of the share repurchase program, the company has bought back $600.0 million of shares and is expecting to complete the program by the end of fiscal 2011 or early 2012.
Fiscal 2011 Guidance
With the expectation of mid single-digit growth in revenue, management has reiterated its full-year 2011 adjusted earnings expectation in the range of $2.10 to $2.15 per share. During fiscal 2011, the company is anticipating to generate a free cash flow of approximately $475.0 million to $500.0 million and deploy approximately $400.0 toward capital expenditure.
Coca-Cola Enterprises, which competes with Kraft Foods Inc. (KFT) and PepsiCo Inc. (PEP), currently has a Zacks #3 Rank, implying a short-term Hold rating. Moreover, we maintain a long-term Neutral recommendation on the stock.
COCA-COLA ENTRP (CCE): Free Stock Analysis Report
KRAFT FOODS INC (KFT): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment