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Coca-Cola Enterprises (CCE) 4Q Earnings Drop 11.5 Pct, Yet Beat Estimates

 February 07, 2013 09:10 AM

(By Balaseshan) Coca-Cola Enterprises Inc. (NYSE: CCE), a maker of nonalcoholic beverages, reported a 11.5% drop in quarterly earnings due to the impact of the French excise tax increase, as well as higher costs and expenses. Comparable earnings exceeded Street's expectations, while revenue matched consensus.

Profit fell 11.5% to $100 million for the fourth quarter, while earnings per share (EPS) declined 5.6% to $0.34. Comparable earnings rose to $131 million or $0.45 per share from $116 million or $0.36 per share.

Sales increased 1.2% to $1.92 billion from last year. Sales rose 2% on a currency neutral basis, and was flat on a currency neutral basis excluding the impact of the French excise tax increase.

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Analysts, on average, surveyed by Thomson Reuters had expected EPS of $0.44 on revenue of $1.92 billion for the fourth quarter.

Volume decreased 5.5%, driven by ongoing challenging conditions and cycling strong growth in the prior year. Volume in continental Europe declined 5.5%, and volume in Great Britain declined 6%. Net pricing per case grew 4% and cost of sales per case grew 3.5%, both including the impact of the French excise tax increase.

Looking ahead into the full year 2013, the company expects EPS to grow about 10% on a comparable and currency neutral basis. The company said although it is too early to predict the 2013 currency impact, based on recent rates, currency translation would benefit full-year EPS in a range of 2% to 3%.

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Net sales and operating income are expected to grow in a mid-single-digit range. This guidance reflects declining gross margins with expected net pricing per case growth less than an above-average cost of sales per case growth in 2013. Street analysts predict EPS to rise 12.10% on revenue growth of 5.50%.

The company also expects 2013 free cash flow in a range of $450 million to $500 million. Capital expenditures are expected to be about $350 million.

CCE closed Wednesday's regular session at $34.90. The stock has been trading between $26.05 and $35.48 for the past 52 weeks.



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