Atlanta-based soft drinks bottler Coca-Cola Enterprises reported increases in second-quarter sales and profits that prompted one analyst to say that Wall Street is getting "spoiled" by its string of successes.
CCE, which sells drinks only in Europe, said revenue rose 22 percent to $2.4 billion. Profits jumped 24 percent to $246 million, up from $199 million from the second quarter a year ago. That equated to 74 cents per share, which matched Wall Street's expectations. On a comparable basis, the company earned 76 cents per share.
Comparisons to previous periods were complicated by the company's transfer of its North American territory to Coca-Cola Co. last year.
CCE's sales volume rose 4.5 percent, more than analysts had predicted. Sales in Great Britain rose only 1.5 percent, but those in continental Europe jumped 7.5 percent thanks to the growth of Sprite, Fanta and Dr Pepper, which the company distributes.
Coke Zero volume rose 15 percent and the Coca-Cola brand grew 4 percent. Energy drinks also rose strongly. The company was able to raise prices and vowed to focus on keeping costs low.
Chief executive John Brock said the quarter demonstrated the growth potential of Western European markets.
The bottling business is "running smoothly," said UBS analyst Kaumil Gajrawala. "We remain confident that the company can deliver" on its growth targets for the year, he said.
As part of its deal last fall with Coca-Cola, CCE retains the right to acquire German bottling operations from Coca-Cola at "fair value." Coke executives said this month that marketing tied to the company's 125th anniversary is helping raise sales in Germany, one of Europe's powerhouse economies.
Volume trends in Germany have accelerated in recent quarters, said John Faucher, an analyst with J.P. Morgan.
Credit Suisse analyst Carlos Laboy said negotiations for the purchase of German bottling rights are probably underway.
"We reiterate our hope and belief that management is likely to be very disciplined in paying for future earnings without having to pick up the repair tab for Coke's past mistakes," he said.
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