Coca-Cola Enterprises Misses Second-Quarter Targets, Plans Restructuring

ByBridgeNews Coca-Cola Enterprises Inc., the world's largest bottler of Coca-Cola soft drink brands, on July 17 reported quarterly profits below Wall Street targets, lowered its full-year earnings outlook, and announced a restructuring plan that will eliminate about 3% of it workforce. Net income of $114 million, including a one-time tax benefit of $46 million, was down from $122 million a year ago. Excluding the tax credit, second-quarter profits of 16 cents per share compared with 30 cents a year ago and fell short of the 29 cents per share analysts projected in the First Call/Thomson Financial survey. "Clearly our year-to-date results are disappointing, and we are taking action to address the cost issues contributing to this performance," says CEO Lowry F. Kline. The company says it will record restructuring and other charges of $60 million to $80 million in the second half of the year related to the consolidation of operating units and plans reductions in operating expenses. The restructuring will eliminate approximately 2,000 North American positions, the company said. Coca-Cola Enterprises management said in addition to cutting its workforce from the current 67,000, the restructuring charges will relate to write-downs related to technology and changes in North American operations. Coca-Cola Enterprises case volume was up 3.5% on a comparable basis during the quarter with 2.5% growth in North America amid expanded distribution of the Dasani bottled water line and 6% growth in Europe. "Despite improved North American volume performance in the second quarter, efforts to manage the competitive retail price gap that exists in many of our markets resulted in little or no price increase," John R. Alm, chief operating officer, says.