Coca-Cola Enterprises Inc.‘s (CCE) fourth-quarter 2010 earnings of 28 cents per share (including results from Norway and Sweden) were is in line with the Zacks Consensus Estimate. This also compares favorably with earnings of 22 cents in the year-ago quarter.
For the full-year 2010, earnings came in at $1.83 per share ($1.78 a share excluding items affecting comparability and including other pro forma adjustment), ahead of the Zacks Consensus Estimate of $1.79.
Apart from including Norway and Sweden, results for the reported quarter exclude the North American operation of the company. Results for the prior-year quarter, however, exclude Norway and Sweden and include the North American operation.
During the fourth quarter of 2010, Coca-Cola Enterprise divested its North American bottling business to the beverage giant Coca-Cola Company (KO). Coca-Cola Enterprises is now a newly registered company comprising its legacy European bottling operations and the bottling operations acquired from the Coca-Cola Company in Norway and Sweden.
Financial Details
During the fourth-quarter, Coca-Cola Enterprises’ sales increased 12% to $1,794.0 million from $1,605.0 million in the year-ago period on the back of 4% increase in volume in all territories, followed by 1% increase in product prices, partially offset by rise in cost of goods sold by 2.5%.
Sales for the full year increased 3% to $6,714.0 million from $6,517.0 million in 2009.
Gross profit for the quarter increased 8% to $633.0 million from $587.0 million recorded in the year-ago quarter. While for the full year, gross profit rose 3% to $2,480.0 million from $2,404.0 million in 2009.
However, Coca-Cola Enterprises’ operating margin declined to 7.47% in the reported quarter from 8.6% in the prior year quarter primarily due to increased selling, delivery and administrative expenses. While, operating margin of 11.1% for the full year remains almost in line with the prior year.
Balance Sheet, Cash Flow and Dividend
Coca-Cola Enterprises exited the quarter with cash and cash equivalents of $321.0 million, compared with $404.0 million in the year-ago period. As of December 31, 2010, the company generated $825.0 million of cash from operations and deployed $291.0 million toward capital expenditure.
Earlier, on February 08, the board of directors of Coca Cola Enterprises declared a quarterly dividend of 12 cents per share. The dividend will be paid on March 24, 2011 to shareholders of record on March 11, 2011.
Fiscal 2011 Guidance
Bolstered by the better-than-expected annual performance, Coca-Cola Enterprises expects full-year 2011 adjusted earnings in a range of $1.95 to $2.00 per share. During fiscal 2011, the company is anticipating to generate a free cash flow of $425.0 million and deploy approximately $400.0 towards capital expenditure.
Coca-Cola Enterprises is anticipating an annualized dividend of 50 cents per share in fiscal 2011.
Coca-Cola Enterprises, which competes with PepsiCo Inc. (PEP), currently has a Zacks #3 Rank, implying a short-term ‘Hold’, rating. Besides, we maintain a long-term “Neutral” recommendation on the stock.
COCA-COLA ENTRP (CCE): Free Stock Analysis Report
COCA COLA CO (KO): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
Zacks Investment Research
