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Coca-Cola Enterprises (CCE) Beats on Earnings, Miss Revenues

Coca-Cola Enterprises Inc. CCE, the Western European bottler of The Coca-Cola Company, serves a market of more than 170 million consumers throughout Belgium, continental France, Great Britain, Luxembourg, Monaco, the Netherlands, Norway and Sweden.Coca-Cola Enterprises is due to merge with two of The Coca-Cola Company’s (KO) European bottlers — Coca-Cola Iberian Partners and Coca-Cola Erfrischungsgetränke AG — to form a Western European bottler — Coca-Cola European Partners. The transaction is expected to close by the end of second-quarter 2016.

Coca-Cola Enterprises undertakes many initiatives to support top line growth, which includes aggressive marketing/innovation plans like sports sponsorships and special programs to expand the distribution of new products; and online marketing plans to enhance digital and social media presence. Moreover, favorable commodity cost trends and regular shareholder returns should drive earnings growth. 

However, Coca-Cola Enterprises’ top line are hurt by the ongoing economic softness in Europe, evolving consumer landscape and an increasingly competitive environment. Moreover, currency translation, which provided tailwinds in 2014, has proved to be a major headwind in 2015, given the recent deterioration of the euro against the dollar.

Investors should also note that earnings estimate movement for CCE has not been significant for sometime. However, CCE has a decent earnings history. The global bottling company has posted four back-to-back positive earnings surprise in the past four quarters, with an average positive surprise of 3.50%.

Currently, CCE has a Zacks Rank #2 (Buy), but that could definitely change following Coca-Cola Enterprises’ earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

Earnings: CCE beat on earnings. Our consensus earnings estimate called for EPS of 40 cents /share, and the company reported EPS of 41 cents instead. Investors should note that these figures take out stock option expenses.

Revenues: CCE reported revenues of $1.517 billion, missing our consensus estimate of $1.526 billion.

Key Stats to Note: Volumes declined 4% year over year.

Stock Price: Inactive in pre-market trading.

Check back later for our full write up on this CCE earnings report later!

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