Will Coca-Cola Put The Genie Back In The Bottle?

06-Nov-2015 - USA

Coca-Cola Enterprises Inc. (CCE) is set to report its third-quarter numbers before the bell on Thursday, October 29. Analysts, polled by Thomson Reuters, have a consensus earnings estimate of $0.81 per share on revenue of $1.87 billion. In the last quarter, the company reported lower profit, impacted by a soft consumer environment. However, earnings and net sales surpassed analysts' estimates. 

The company's second-quarter net income was $176 million or $0.75 per share compared to $198 million or $0.78 per share in the prior year period. 

Non-GAAP net income amounted to $187 million or $0.79 per share compared to $229 million or $0.90 per share earned a year ago. 

Net sales declined to $1.93 billion from $2.33 billion reported in the same period of last year. 

"The consumer environment across our territories continues to limit retail value growth, including the nonalcoholic ready-to-drink category," said John Brock, chairman and chief executive officer. "We are managing each element of our business to maximize the value of our brands, to sustain high levels of customer service, and to improve our growth outlook. 

During the second-quarter earnings call, the company has warned that the currency translation will continue to impact its results, and based on recent rates, would reduce full-year 2015 earnings per share by about 18%. It also continues to expect 2015 free cash flow in a range of $600 million - $650 million with capital expenditures of about $325 million. 

While currency translation headwinds continue to impact free cash flow and capital expenditures, the company is maintaining its outlook through efforts such as improving working capital. The company remains focused on managing each of the levers of its business effectively, maximizing its efficiency and seizing opportunities created by an ongoing benign cost of goods environment.

In addition, the company continues to seek ways to improve its growth outlook. 

Given these factors and the company's ability to adapt as marketplace conditions evolve throughout the year, it affirmed full-year 2015 earnings growth forecast at the upper end of its guidance range of 6% - 8%. 

Coca-Cola believes that its operating and marketing strategies activated by the skill and commitment of its people will enable it to achieve this guidance. The company continues to move forward with its efforts to return cash to shareowners through a combination of dividends and share buybacks. Coca-Cola has hiked its dividend by 12% earlier this year and said it is on track to repurchase $600 million of its shares by year end. (dpa) 

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