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Coca-Cola Enterprises Posts 7 Percent Decline in Quarterly Net Income

Posted on: Friday, 28 October 2005, 12:00 CDT

By Caroline Wilbert, The Atlanta Journal-Constitution

Oct. 28--Coca-Cola Enterprises reported a 7 percent drop in net income for the third quarter, citing poor sales in Europe and the impact of Hurricane Katrina in the United States.

Atlanta-based CCE, the largest bottler of Coke products, earned $192 million in the quarter, down from $207 million in the same quarter a year ago. Income per share was 40 cents, down from 44 cents in the same quarter a year ago. Excluding one-time expenses related to property damage from hurricanes and the cost of a management restructuring, the company had earnings of 47 cents a share, meeting analyst expectations. CCE in September lowered expectations for the third quarter.

The company had revenue of $4.9 billion in the third quarter, up from $4.67 billion in the same quarter a year earlier.

CCE on Thursday also reduced its full-year forecast to between $1.27 and $1.30 per share from the low to mid- $1.30s. The company blamed high costs, such as the price of resin used to make plastic bottles, as well as a difficult retail environment in Europe.

The stock closed at $18.86 per share, down 3 percent.

CCE, which distributes Coke products in France, the United Kingdom and other parts of Europe, said volume in Europe fell 2 percent. CCE is facing a generally difficult economic environment there, as well as the growth of discounters and increased concerns about health and wellness. Coke and CCE have launched new products and major marketing initiatives for diet drinks to try to appeal to Europeans who are watching their weight.

The company said it is pleased with its North American performance, where the company had volume growth of 1 percent.

Chief Executive John Alm said flavored Dasani, Powerade and energy drinks, including Full Throttle, are performing particularly well. He also said the company is pleased with Coke Zero, which he predicted "will have increasing consumer appeal." Coke Zero, a new diet drink, went on the market in June. Coke is about to start a new marketing campaign for the drink.

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Copyright (c) 2005, The Atlanta Journal-Constitution

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CCE, KO,

Source: The Atlanta Journal and Constitution

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