Coca-Cola Enterprises' first-quarter revenue falls, profits rise

The Atlanta-based company posted growth in both revenue and profit in Europe as it raised prices and sold more beverages. CCE plans to sell its North American operations to Coca-Cola Co. and acquire bottling operations in Norway and Sweden later this year.

Given that plan, "trends in Europe should take center stage," J.P. Morgan analyst John Faucher wrote. UBS analyst Kaumil Gajrawala said the European business "once again stood out on solid fundamentals."

CCE executives said Coca-Cola's sponsorship of the World Cup will help the bottler build excitement. They described Western Europe, with relatively modest per capita consumption of Coca-Cola drinks, as a significant opportunity.

In the troubled North American market, CCE suffered a decline in revenue (down 5.5 percent) and volume (down 2.5 percent). The company said North American performance was beset with "difficult conditions in key business segments," such as sales in restaurants and in single-serve drinks.

The bottler said trends in North America improved as the quarter progressed. Despite falling prices, the company used lower costs per case of drinks to notch its sixth straight quarter of wider profit margins in North America.

"We remain dedicated to protecting margins and expanding them over time," said John Brock, the company's chairman and CEO. "Though we face a challenging consumer spending environment in North America...we remain on track" to achieve this year's targets, he said.

In 2010, the company expects its revenue to increase at a low single-digit rate in 2010, with mid-single-digit growth in Europe and flatness or a low-single-digit decline in North America.