Coca-Cola Enterprises ( CCE - Analyst Report ) , one of the world’s largest independent bottlers for Coca-Cola, is set to unveil its second quarter 2012 results on July 23, 2012, before the market opens. The Zacks Consensus Estimate for the second quarter earnings is 73 cents on revenues of $2.29 billion.

First Quarter 2012 Recap

Coca-Cola Enterprises posted first quarter 2012 adjusted earnings (excluding the impact of restructuring charges and mark-to-market commodity hedges) of 36 cents per share. The result exceeded both the Zacks Consensus Estimate and the prior-year quarter earnings of 33 cents per share. The results were driven by an improved top line.

During the quarter, Coca-Cola Enterprises' sales increased 2.5% to $1.87 billion on a currency neutral basis, excluding the impact of the French excise tax increase. Sales were almost in line with the Zacks Consensus Revenue Estimate of $1.86 billion.

Agreement of Estimate Revisions

One of the 9 estimates for the second quarter of 2012 was lowered in the last 7 days. Over the last 30 days, seven of the estimates were lowered.

Similarly, in the last 7 days, one of the 12 estimates was revised downward for the full year 2012. Over the last 30 days, seven out of 12 estimates were revised downward for the full year 2012.

Previously, Coca-Cola Enterprises anticipated that currency would hurt earnings by approximately 6% in 2012. In mid-June 2012, the company announced that currency may further reduce the full-year earnings per share in a high single-digit range, much more than prior expectations. This explains the downward movement of the estimates.

Magnitude of Estimate Revisions

The Zacks Consensus Estimate for the second quarter of fiscal 2012 has remained static at 73 cents over the last 7 days. However, the estimate has declined by 3 cents over the last 30 days from 76 cents to 73 cents. The Zacks Consensus Estimate for fiscal 2012 declined by 1 cent to $2.23 per share in the past 7 days, and has declined by 4 cents during the past 7 days.

Surprise History

Coca-Cola Enterprises’ surpassed the Zacks Consensus Estimate in three out of the last four quarters. The company results were in line with the Zacks estimate for the fourth quarter of 2011. On average, the surprise was a 5.38% in the trailing four quarters.

Our Recommendation

Currently, we have a Neutral recommendation on Coca-Cola Enterprises. The stock carries a Zacks #3 Rank (a short-term Hold rating).

We are encouraged by the company’s strong brand portfolio and solid cash position. However, the French excise tax increase and economic challenges in Europe create significant overhang. We thus prefer to remain on the sidelines.