Coca-Cola Enterprises Inc
The largest bottler of Coca-Cola Co
Shares of Coke Enterprises rose 1.7 percent to $20.39 in midday trading.
The company, which bottles and distributes products ranging from Coca-Cola and Sprite to Minute Maid juice and Powerade sports drinks, has seen sales suffer as consumers avoid higher-priced drinks and cut back on dining out.
Price increases and initiatives such as selling 16-ounce cold bottles of Coca-Cola for 99 cents have helped the company protect its profits. The 99-cent initiative is driving one million additional transactions each week for the Coca-Cola system, Coke Enterprises said on a conference call.
Coke Enterprises also said it plans to raise prices in North America by 2 percent to 3 percent after the February 7 Super Bowl. The NFL's championship game is a busy time for soft drink companies as fans stock up for game-day parties.
HIGHER END OF FORECAST
The company said it now expects to earn $1.56 to $1.59 per share this year, up from an October forecast of $1.54 to $1.57. Analysts had been looking for $1.57, according to Thomson Reuters I/B/E/S.
The company's 2009 forecast includes a hit from currency fluctuations and excludes other items.
For 2010, it expects comparable earnings per share to rise in a high single-digit percentage rate, excluding the impact of currency. At current rates, currency would add about 4 cents per share to profit, Coke Enterprises said.
That view is in line with analysts' average forecast of $1.77 per share.
This should be enough to appease investors as CCE's multiple (using consensus) had come down over the past few months, JPMorgan analyst John Faucher wrote in a research note.
Coke Enterprises expects revenue to rise in a low to mid single-digit percentage range this year, excluding the impact of currency. Including the currency hit, revenue should decline slightly.
For 2010, Coke Enterprises said it expects mid single-digit operating income growth in both Europe and North America. Revenue should rise at a low single-digit rate, driven by mid single-digit growth in Europe and slight growth in North America. North American volume should decline modestly.
Chairman and Chief Executive John Brock said his company would continue to work closely with Coke to address the challenging North American market in 2010.
Earlier this week, Coke's CEO said his company would stick with its business model, in which it sells drink concentrate to bottlers such as Coke Enterprises.
Rival PepsiCo Inc
(Reporting by Jessica Wohl; Editing by Lisa Von Ahn, Dave Zimmerman and John Wallace)