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CBRY Cadbury

863.00
0.00 (0.00%)
Last Updated: 01:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Cadbury LSE:CBRY London Ordinary Share GB00B2PF6M70 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 863.00 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Developing Markets To Draw Interest At US Consumer Conference

12/02/2010 2:42pm

Dow Jones News


Cadbury Schweppes (LSE:CBRY)
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Executives of the world's largest consumer-goods companies will gather at an industry conference next week in Florida, where many companies are likely to offer deeper insight into their plans to bolster sales overseas in the wake of the spending slump in the U.S.

Many branded makers of basic goods like detergents, drinks and cosmetics that saw weakness in sales during the recent recession are now under pressure to convince shareholders that they can revive business in North America, while boosting sales in emerging markets. Investors and analysts will scrutinize those strategies as well as these companies' plans on dividends, buybacks and acquisitions at the Consumer Analyst Group of New York conference at Boca Raton.

"It will be about where they are finding growth [and] potential opportunities," said Walter Todd, a portfolio manager at Greenwood Capital, which holds shares of consumer-staples companies.

Kraft Foods Inc. (KFT), one of the early presenters when the conference starts Tuesday, will also report its fourth-quarter earnings the same day. Based on a Thomson Reuters survey of analysts, Kraft is expected to earn 45 cents a share on revenue of $11.07 billion.

Investors will pay attention to what the company might say regarding its recently announced deal to buy Cadbury PLC (CBY), which will give the U.S. food maker a big presence in Asia. Kraft is expected to provide more details in coming months on integrating its massive candy business, and utilizing the Cadbury supply network to bolster Kraft's international presence.

"In the underlying business, [Kraft] had been gaining traction prior to Cadbury. Beyond that, it would [be] great to get some details on cost savings, revenue synergies and the integration in general," said Morningstar analyst Erin Swanson.

The largest consumer companies are also likely to face questions about their acquisition strategies, particularly as many makers of consumer staples are cash-rich. Companies like Coca-Cola Co. (KO) have said they will push for the wider use of their products and increased per-capita consumption in developing markets, though they haven't shut the door to deal-making.

Coca-Cola's presentation will be made by the president of its Latin America group, Jose Octavio Reyes, another sign of the growing importance of developing markets for the company.

Some companies could also offer clues about their cash utilization. Sara Lee Corp. (SLE) has said it will provide further details of its dividend and buyback plans at the conference. Hershey Co. (HSY), meanwhile, which failed to make a bid for Cadbury, has in recent weeks said it remains open to making acquisitions. The candy maker said it will use the event to share more views about the types of retail and consumer trends it sees in the industry.

While overseas markets will be crucial to growth, consumer-goods manufacturers would also need to highlight how they plan to entice reticent consumers in the U.S. to trade back to higher price brands. Sales in the U.S. have been growing at a slower rate than emerging markets in recent years, but the U.S. is still the single largest profit source for many of the companies.

Food makers, in general, will need to give investors details about how they will continue their long-running fight against cheaper private labels and what steps they are taking to get consumers to trade up now that the economy is picking up, said Morningstar's Swanson.

Recent results have shown sales improvement for a number of companies, including Procter & Gamble Co. (PG) and Sara Lee. But investors have also worried that consumer companies have been offering more price promotions and lower-priced products to drive up volumes, and would like to gain clarity from manufacturers' plans to balance margins with sales growth. Attendance at the conference is up this year with more than 500 analysts attending, compared with 465 last year.

-By Anjali Cordeiro, Dow Jones Newswires; 212-416-2200; anjali.cordeiro@dowjones.com

 
 

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