(Updates with stock movement and comments from a conference call
on supply chain initiatives with Coca-Cola Co.)
DOW JONES NEWSWIRES
Coca-Cola Enterprises Inc. (CCE) swung to a fourth-quarter net
loss on a $2.3 billion write-down on the value of North American
franchise licenses as revenue and margins fell for Coca-Cola Co.'s
(KO) biggest bottler.
The stock surged 10% after the bottler's results beat
expectations and the company offered more color on a supply chain
initiative with Coke. The bottler said it expect to see benefits
from important supply chain improvements such as the implementation
of Coca-Cola Supply, a joint organization that will lead the effort
to integrate supply chain activity between CCE and the Coca-Cola
Co.
The bottler said it has selected key management, has created a
defined operating structure and engaged with other North American
bottlers on the development of that organization.
Soda bottlers have struggled with weakened volumes as North
Americans turn to other drinks, including bottled water and
vitamin-infused beverages. The industry is seeing some benefit as
commodity costs moderate from last summer's high.
Coca-Cola Enterprises posted a fourth-quarter net loss of $1.45
billion, or $2.99 a share, compared with year-earlier net income of
$158 million, or 32 cents a share. Excluding items such as the
write-down, caused in part by CCE's tumbling stock price, earnings
fell to 22 cents from 29 cents.
Revenue decreased 1.2% to $5.24 billion as higher prices nearly
offset a 5% volume drop.
Analysts polled by Thomson Reuters expected earnings of 19 cents
a share on revenue of $5.23 billion.
Gross margin edged down to 37% from 37.7%.
North American volume slumped 7% amid a 9.5% price increase
while European volume rose 1.5% while prices per case rose a more
modest 2.5%.
Coca-Cola Enterprises, which reiterated its 2009 earnings
forecast, sees volume falling again this year in North America, but
the region's revenue should grow by the mid-single digits on a
percentage basis because of the price hikes. The same revenue
increase is seen for Europe, as volume will grow "modestly."
Coca-Cola Enterprises in December announced a restructuring
aimed at boosting operating profit by $150 million by 2011 for the
company and Coca-Cola. The moves will include efforts to better
coordinate capacity and transportation planning with concentrate
producer Coca-Cola.
-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310;
shirleen.dorman@dowjones.com
-By Anjali Cordeiro; Dow Jones Newswires; 201-938-2408;
anjali.cordeiro@dowjones.com