Coca Cola Enterprises Beats, Raises

Coca Cola Enterprises (CCE - Analyst Report) reported its second consecutive quarter of strong results, with earnings of 51 cents per share. Earnings were 5 cents above the Zacks Consensus Estimate of 46 cents, driven by the benefits of price and package initiatives in North America, volume and pricing growth in Europe and efficient cost control mechanisms.

Net operating revenues during the quarter declined 3% year-over-year. Benefits of positive net pricing (+7.5% in North America and +4.5% in Europe) were fully offset by 10.0% volume declines in North America. Volumes in Europe grew 4.0%. Currency translations have negatively impacted the top-line by 3.0%. Overall physical case and can volume declined 6.5% while net revenue per case increased 7.5% year-over-year.

In North America, revenues fell 3.9% as the benefits of pricing and packaging initiatives of 7.5% were fully offset by volume declines of 10% year-over-year. In the year-ago period, North American sales got a boost from Olympic-related promotions and the benefit of July 4th holiday falling in the quarter.

European revenues declined marginally by 0.9% driven by strong volume and pricing in the quarter. Volumes grew 4.0%, driven by a 4.5% growth in the Coca-Cola trademark brands. Pricing also benefited the segment by 4.5%.

Based on the robust performance during the first nine months of 2009, management raised guidance for the full year. Earnings are now expected in the range of $1.54 to $1.57 per share. Previous guidance was $1.44 to $1.49 per share. The guidance includes full year negative currency impact of approximately 16 cents.

Excluding the impact of currency, on reported basis revenue is expected to decline slightly. The company also expects strong free cash flow of approximately $800 million and capital expenditures of approximately $900 million.