By Cam Wood
ATLANTA – Coca-Cola Enterprises Inc. lost $3.17 billion in the second
quarter and plans to raise prices in the United States, where soda
sales have declined.
ATLANTA – Coca-Cola Enterprises Inc. lost $3.17 billion in the second quarter and plans to raise prices in the United States, where soda sales have declined.
The Atlanta-based Coke bottler said Thursday it lost $6.52 per share, compared with a year-ago profit of $270 million, or 56 cents per share.
The loss included a $5.3-billion writedown of the value of a franchise licence in North America due to an expected decline in operating income, higher commodity prices and its falling share price.
Excluding the one-time charge, which lowered per-share profit by $7.06, the company said earnings per share were 56 cents in the quarter.
Analysts polled by Thomson Financial expected an ex-items profit of 53 cents per share on revenue of about $6 billion.
Coca-Cola Enterprises revenue rose five per cent to $5.94 billion from $5.67 billion.
The company's results were helped by favourable tax and currency exchange rates as well as modest growth in Europe, but U.S. sales and operating income both fell.
Chief executive John Brock said that to deal with higher commodity costs and declining U.S. sales, the company will raise American prices after Labour Day.
Brock also said the company will review its supply chain, operations and price strategy as well as "put into motion the essential changes required" to improve its performance in the U.S.
"This work requires continued co-operation with the Coca-Cola Co. as we work together to improve the long-term outlook for our North American business over the coming months," he said in the statement.
Analysts have said that if its bottler raises prices, Coca-Cola Co. may want to raise its own prices.
SOURCE: The Associated Press