ATLANTA — Coca-Cola Enterprises today reported first-quarter 2005 net income of $46 million, or 10c per diluted share. The results compare with net income of $104 million, or 22c per diluted share in first-quarter 2004.
Operating income for the first quarter 2005 totaled $220 million for the first quarter, down 28% versus the prior year.
The 2005 results reflect two fewer selling days in 2005, lower volume in the company's European territories as well as the impact of the high cost of goods environment. These factors were partially offset by the benefit of the company's cost control efforts, which resulted in operating expenses below prior year, the company said.
Coca-Cola Enterprises reaffirmed its 2005 earnings guidance with earnings per diluted share expected in the low-to-mid $1.30s.
C.C.E. continues to expect strong cash flow from operations in 2005. Full-year 2005 cash flow from operations less capital spending is expected to total more than $700 million.
"We achieved earnings at the low end of our guidance as we worked through a period of weak category performance and high cost of goods increases," said Lowry F. Kline, chairman of the board. "With the operating flexibility created by our cost control efforts, we can maintain our full-year outlook.
"We believe that upcoming product introductions and a strengthening revenue management environment will drive improving results for the balance of the year."
Physical case bottle and can volume declined 1.5% on a comparable basis for the quarter. Volume in North America was flat for the quarter, while volume in Europe decreased 5.5%.
North American volume results reflect weak category performance for regular soft drinks, partially offset by the continued strong growth of Dasani and Powerade. North America also benefited from the introduction of Coca-Cola with Lime, Full Throttle and Dasani flavored waters.
In Europe, C.C.E.'s business outperformed the overall soft drink category, but weak category performance resulted in volume below prior year.
"As we move into our key selling season, our focus in North America remains on successfully introducing several important new products, such as Diet Coke Sweetened with Splenda, Coca-Cola Zero, Full Throttle and Dasani flavored waters," said John R. Alm, president and chief executive officer. "And, just this morning we announced we will distribute Rockstar, a rapidly growing energy drink.
"All of our new products target categories that are experiencing solid growth and are an integral part of our operating plan to work through a challenging business environment in 2005.
"In Europe, our business is showing improvement as we enter the second quarter, and we expect solid growth this summer as we benefit from a strong marketing calendar and new product and package introductions," Mr. Alm said.
A key element of the company’s marketing plans is focused on consumer education regarding the benefits of the zero calorie, zero sugar products, he said. These include Diet Coke and Coca-Cola Light with Lime in the United Kingdom and France, orange-flavored Coca-Cola light Sango in Belgium, a variety of Minute Maid juices and juice drinks in each of the territories, as well as new packaging such as Fridge Pack.