Tuesday, Coca-Cola Co.'s (KO) biggest bottler Coca-Cola Enterprises Inc. (CCE) posted a jump in first-quarter profit, as revenues rose 3% on improved North American operating trends and continued growth in Europe. Adjusted earnings topped analysts' estimates. The distributor of Coca-Cola, Minutemaid, Powerade, and Dasani brand beverages also revised its earnings and revenue growth target for fiscal 2009.
Net income climbed to $61 million or $0.13 per share from $8 million or $0.02 per share in the year-ago period. Non-GAAP net income rose to $97 million or $0.20 per share from $38 million or $0.08 per share in the prior-year quarter.
On average, 10 analysts polled by Thomson Reuters expected the company to post earnings of $0.05 a share. Analysts' estimates typically exclude special items.
Net operating revenues were $5.05 billion, up 3% compared to $4.89 billion in the corresponding period last year and were better than analysts estimate of $4.86 billion. The company noted that revenue was offset by about 8% in unfavorable foreign exchange.
Operating income grew to $241 million from $163 million last year. Operating income grew $89 million in North America and $3 million in Europe, after a $40 million negative foreign currency impact.
For the full year, the company anticipates adjusted earnings of $1.24 - $1.29 per share, including an expected $0.20 per share negative impact from foreign exchange. This is a revision from the February 11 outlook, when the company said it expects full-year earnings per share to grow in the mid single-digit range. Analysts' consensus is for earnings of $1.20 a share for fiscal 2009.
Coca-Cola Enterprises currently expects North America revenue to increase in a low to mid single-digit range for the full year. Previously, the Coke bottler expected revenue to increase in a mid single-digit range. The company continues to expect European revenue to grow in a mid single-digit range.
The company emphasized that continued improvements in North America and growth in Europe are essential to full-year success.
Commenting on the outlook, John Brock, chairman and chief executive officer of the company, said "We remain cautious about the rest of the year, however, as the first quarter is our smallest reporting period and general economic conditions remain challenging, both in North America and Europe."
On April 22, rival Pepsi Bottling Group Inc. (PBG) posted first-quarter net income attributable to company of $57 million or $0.27 per share, compared to $28 million or $0.12 per share in the same period last year. Pepsi Bottling also has raised its comparable earnings outlook for the full year to a range of $2.20 - $2.30 per share from its earlier projection of $2.15 - $2.25 per share for the full year. Analysts estimate fiscal 2009 earnings to be $2.25 a share.
CCE is currently trading up 70 cents or 4.63% at $15.83.
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