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Coca-Cola Enterprises (CCE - Analyst Report), the Western European bottler of The Coca-Cola Company (KO - Analyst Report), reaffirmed its financial guidance for 2014 at the Deutsche Bank Global Consumer Conference in Paris.

In 2014, adjusted earnings are expected to increase approximately 10% in constant currency terms. In addition, according to recent rates, currency is expected to benefit 2014 earnings per share by approximately 5%.

While adjusted constant currency net sales are expected to grow in the low single-digit range, operating income is expected to grow in the mid single-digit range. Operating income growth is expected to be weighted toward the second half of the year.

Management’s 2014 revenue and operating income outlooks are below the long-term targets of 4–6% and 6–8%, respectively, anticipating continued operating/marketplace challenges.

Coca-Cola Enterprises is geographically focused on Western Europe and is thus exposed to the economic uncertainties of this region, including debt burdens of some of these countries and the challenging consumer spending environment. The company has been facing several operating and marketplace challenges, such as steep price competition in Great Britain, overall soft macroeconomic conditions and difficult beverage market conditions in France due to the increase in French excise tax.

Though the earnings per share guidance of approximately 10% growth is above the long-term target of high single-digit range growth, it will be mostly driven by share buybacks.

Coca-Cola Enterprises expects free cash flow for full-year 2014 to be $650 million. Capital expenditures are still expected to be approximately $350 million. The company expects the weighted average cost of debt to be around 3%. Effective tax rate is expected within 26% to 28%.

Other Stocks to Consider

Coca-Cola Enterprises carries a Zacks Rank #3 (Hold). Better-ranked beverage stocks include The WhiteWave Foods Company (WWAV - Snapshot Report) and Dr Pepper Snapple Group, Inc. (DPS - Analyst Report). Both the companies carry a Zacks Rank #2 (Buy).

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