ATLANTA (AP) — Coca-Cola Enterprises Inc., which bottles the soda company's products in Europe, said Monday that its second-quarter net income fell 17 percent as sales volume declined and the dollar strengthened.
The company also cut its outlook for the full year, with a profit estimate range that fell mostly below analysts' forecast.
The volume decline stemmed from unfavorable weather and "marketplace challenges," said CEO John Brock. The Atlanta company serves the U.K., France, the Netherlands, Norway, Sweden and other countries. Many European economies are in or near recession, and consumers are cutting back on spending.
Coca-Cola Enterprises earned $205 million, or 67 cents per share, in the April-June period, compared with $246 million, or 74 cents per share, a year earlier.
Stripping out restructuring charges and other items, earnings were 73 cents per share, in line with Wall Street's expectations, according to FactSet.
The stronger dollar lowered earnings by 8 cents per share, or 10.5 percent. When the U.S. dollar is rising against the other world currencies, companies that do business internationally take a hit when converting local currencies back into the dollar.
Revenue for the period ended June 29 dropped 8 percent to $2.21 billion from $2.41 billion. Analysts expected $2.27 billion.
Volume fell 6 percent, for which the company blamed on unfavorable weather and a French tax on sweetened beverages that went into effect this year. Volume of sodas and non-carbonated beverages like juices and teas declined, while energy drinks volume rose 16 percent and Coke Zero, a soda that doesn't have any calories, rose 2.5 percent.
While the price per case increased 6.5 percent in the quarter, the cost of sales per case rose by the same percentage.
For the full year, Coca-Cola Enterprises expects earnings between $2.18 and $2.24 per share, down from an earlier guidance predicting growth of 10 percent, or about $2.40 per share. Wall Street predicts earnings of $2.24 per share.
The company now expects 2012 revenue will increase by a "mid-single-digit" percentage — around 4 to 6 percent, typically — from a previous forecast of a high-single-digit percentage increase. Wall Street analysts are more pessimistic. They expect revenue to be up just 0.5 percent from a year ago.