Profits rise for Coke bottler

By Joe Guy Collier

The Atlanta Journal-Constitution

Coca-Cola Enterprises raised its outlook for the year after posting Wednesday strong results for the second quarter.

Atlanta-based CCE, Coke’s largest bottler, reported second-quarter net income of $313 million in the quarter, compared to a $3.2 billion loss in the same period last year.

Excluding last year’s write-down and other one-time costs, CCE still posted improvements. It had comparable earnings of 67 cents per share, well above the 56 cents in the second quarter of last year. The results also beat analyst expectations of 51 cents,, according to Thomson Reuters.

CCE’s revenue fell 0.5 percent to $5.9 billion in the second quarter as the impact of a stronger dollar diminished international results. Excluding the impact of currency translations, revenue rose 6 percent. CCE’s bottle and can case volume fell 1 percent in the quarter but net pricing per case rose 8 percent.

For the full year, excluding one-time items, the company projects earnings of $1.44 to $1.49 per share, 20 cents higher than previously projected.

In a conference call with analysts, CCE executives said the results were driven by a focus on efficiency, balance of costs and prices and cooperative efforts with Coca-Cola. CCE is benefiting from new package options, including 18- and 20-packs of cans, a 2-liter contour bottle and 99-cent 16- and 14-ounce bottles.

CCE cautioned the economy remains uncertain. “We’re proud of our work and the results achieved so far in 2009,” said CCE Chairman and CEO John Brock. “However, we continue to face challenging economic conditions.”

Coca-Cola and CCE will have to cooperate closely to succeed, Brock said. PepsiCo has made bids for its two largest bottlers in hopes of cutting costs and creating a system that can quickly adapt.

Coca-Cola owns about a third of CCE stock but has said it believes in a system of independent bottlers with franchise rights.

“Our working assumption is that those (Pepsi) transactions will happen and that they will have structural integration,” Brock said. “So we are really thinking long and hard about all the things we can do as a complete system within North America.”