Coca-Cola gets a healthy boost

Coca-Cola Enterprises Inc gave its 2007 earnings estimate a healthy boost on Wednesday, partly by adding Glaceau vitaminwater to its system, sending the bottler's shares up nearly 6 percent.

The world's largest bottler of Coca-Cola Co drinks also offered guidance on its 2008 earnings, which analysts said implied a range that was above current Wall Street estimates.

The company cited cost savings, growth in Europe and a tax benefit for its positive outlook.

Stifel Nicolaus analyst Mark Swartzberg said he expects those benefits, and a more fundamental turn, to make 2008 the company's first year of significant growth since 2003.

"We do not believe our '08 view is because we're starry-eyed about vitamin water, cost-cutting, or new management," wrote Swartzberg in a research note. "Rather, we think it is a function of each of these items being a theoretically significant and, in fact, real component of positive structural change."

Coke Enterprises said it now expects 2007 earnings of $1.36 to $1.39 per share, up from a prior forecast for $1.31 to $1.36 per share.

The company also said 2008 earnings would be in line with its long-term target of high-single-digit percentage growth, which Morgan Stanley analyst William Pecoriello said implied a range of $1.47 to $1.52 per share.

Analysts' expectations

Analysts, on average, had been expecting $1.34 per share for 2007 and $1.47 per share for 2008.

The company said 2007 results would include $125 million in restructuring expenses, and an additional $175 million in restructuring costs would be recorded in 2008 and 2009.

Coke Enterprises, which began distributing Glaceau products in the United States in November following Coca-Cola's acquisition of the successful start-up, also said it is talking with Coke, its largest shareholder, about bringing vitamin water to Europe.

"I think you could logically think about Great Britain as being the first market that we would look at to make (Glaceau) work in Europe, said Steve Cahillane, president of the bottler's European group. "It will be one part of our Great Britain water strategy, which clearly needs addressing in 2008 and which we aim to address in 2008."

Chief Executive John Brock also said top priorities included boosting North American sales of carbonated soft drinks and bottled teas, and expanding sales of non-carbonated drinks in Europe.

Agencies

(China Daily 12/14/2007 page16)