DOW JONES NEWSWIRES
Coca-Cola Enterprises Inc.'s (CCE) first-quarter net income
soared as Coca-Cola Co.'s (KO) biggest bottler saw continued
strength from Europe and improved margins and volumes in North
America.
The results were well above analysts' expectations.
The company also said 2009 operating earnings will be slightly
higher than previously expecting, resulting in earnings excluding
items of $1.24 to $1.29 a share. Analysts surveyed by Thomson
Reuters expected $1.20. But Coca-Cola Enterprises sees North
American revenue up by the low- to mid-single digits on a
percentage basis, compared with its prior view of mid-single-digit
growth.
While the industry has felt some relief from lower commodity
costs, U.S. soft-drink bottlers - the manufacturing facilities of
which are geared mostly toward producing soda - have suffered in
recent years as consumers increasingly turn to vitamin water and
other noncarbonated beverages instead of soda, pressuring volumes
and sales.
But early numbers that track store sales and other data suggest
bottlers may be done with the worst volume declines in the U.S. as
companies begin to see some sequential improvement from last year
in the region.
Coca-Cola Enterprises saw U.S. volumes fall 3%, compared with a
7% slump in the fourth quarter, helped by strong growth from
Coca-Cola Zero and the addition of new energy drinks. European
volumes jumped 5.5%. Earlier this month, rival Pepsi Bottling Group
Inc. (PBG) reported U.S. and Canada volumes fell 3% compared with a
7% decline in the fourth quarter.
Coca-Cola Enterprises posted net income of $61 million, or 13
cents a share, up from $8 million, or 2 cents a share, a year
earlier. Excluding restructuring costs and tax impacts, earnings
grew 20 cents from 8 cents.
Revenue increased 3% to $5.05 billion, helped by continued
demand in Europe.
Analysts predicted earnings of 5 cents a share on revenue of
$4.86 billion, according to Thomson Reuters.
Gross margin grew to 37.2% from 36.5%.
Shares closed Monday at $15.13 and there was no premarket
trading. The stock is up 26% this year.
-By Katherine E. Wegert, Dow Jones Newswires; 201-938-5294;
katherine.wegert@dowjones.com