Coca-Cola Enterprises (CCE) updated its fiscal 2009 guidance and also provided an outlook for fiscal 2010. For full fiscal 2009, the company now expects earnings in the range of $1.56 to $1.59. The guidance includes negative foreign currency impact of 14 cents to 15 cents. Excluding the impact of currency, revenue for the year 2009 is expected to increase in the low to mid single-digit percentage range.
Free cash flow for fiscal 2009 is expected to be at approximately $850 million, after the deduction of an expected additional pension contribution of approximately $150 million in the fourth quarter of 2009. Capital expenditures are expected at approximately $900 million.
The company’s strong cash flow allows it to use the cash flow for debt reduction and at the same time aids in returning of cash to shareholders. CCE plans to also begin repurchasing its shares during the first quarter of 2010 under previously authorized share repurchase programs.
Moreover, CCE has doubled its dividends since fiscal 2006. The company is currently paying an annualized dividend of 32 cents per share, a 14% increase over the prior-year period.
Based on the company’s strong performance in fiscal 2009, management also provided guidance for fiscal 2010. Earnings for 2010 are expected to be in the high single-digit percentage range, while currency is expected to add 4 cents to the earnings growth. In addition, the company expects to resume its existing share repurchase program and intends to complete purchasing shares worth $600 million by the end of 2010.
Management expects operating income to increase in the mid to high single-digit range, driven by mid single-digit growth in both Europe and North America. Revenue is expected to increase at a low single-digit rate due to mid single-digit growth in Europe and marginal growth in North America.
The company also expects strong free cash flow of approximately $800 million, and capital expenditures of approximately $1 billion. Interest expense for fiscal 2010 is expected to decline marginally.
Segment wise, North America is expected to have continued marketplace challenges related to general macroeconomic conditions.
In Europe, the company has strong operating and brand plans which include a consistent focus on its Red, Black, and Silver initiative, the World Cup, energy expansion and growth in still beverage. All these are expected to drive continued growth in 2010.
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