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Coca-Cola Enterprises, Inc. Message Board

  • canucanoe1 canucanoe1 Jul 10, 2008 9:35 AM Flag

    Past Week's news

    Are there any thoughts on the past week's news?

    Yesterday's analyst comment regarding Vitaminwater eating into soda sales? I'm not sure I understand this point as this is all part of the beverage plan of KO.

    PBG's results?

    Holiday sales? Jy 4 holiday had sales of $2/12 pk cans. That price was available a decade ago!

    Anyone have thoughts on what true free cash flow will look like this year? That would be without asset sales - it seems CCE likes to put these cash flows in, but that's like burning the furniture to keep the house warm. Sooner or later, after miserably living in a house rapidly losing creature comforts, one has no more furniture to burn!

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    • Awful quiet. With CCE's piss poor ROI and margins, has anyone considered how CCE has tortured their accounting for the first half 2008 numbers, and even with this the earnings fell short? This was regarding how they changed the accounting for corn syrup purchases. My earlier post:

      >>>But CCE is not making the numbers even with these steroids. The 2H08 now must find another $22M in earnings just to make up for what was pushed into the 1H by an accounting change from last year. Has one analyst explained this to a shareholder? <<<

      Will there be more special charges? Gosh - the special charges come so frequently how can anyone stop laughing to consider them "special"?

      Will there be honest discussion of the cost increases?
      Are they choosing to reduce volume to obtain more efficiency and margin?
      Is KO accepting this volume for margin tradeoff?
      Is the public moving to healthier, non soda drinks?
      Are alternative drinks closing the pricing gap with soda?
      How can CCE make money with July 4 sales = to a decade ago?
      Can CCE's balance sheet support this business or is it like a dragging anchor?
      How is free cash flow from operations looking for 2008?
      What is PBG doing that CCE is not?

    • same as usual, bad news getting worse. i have been preicting for some ime that this stock is headed for $15. i initially thought it would get there after earnings, but its now possible that it could happen before and the tack to $13 after what i predict to be lousy earnings. what is becomming obvious is that cce profitability is rapidly declining. vitamin water was supposed to be a saviour and now we learn that its profitabilty (for cce) is lower than the 20oz soda, which cce has already warned is declining in sales and profitability. sounds like cce cut a horrible deal with ko regarding its distribution of vitamin water while also giving away its rights to distribute arizona teas. i wonder if its profits on arizona was greater that what is gets on vitamin water.

      • 2 Replies to carb_beverage
      • Anyone notice that on a year over year comparison basis, that CCE changed the way it accounts for corn syrup purchases? It will help earnings in the first half of the year, and hurt in the 2nd half. See the 1Q report - it reduced costs by $14M (sizeable steroid). In essence, they backloaded the expense hit by using forecasting tools from its supplier this year, but averaging the cost over all the quarters last year. Second half will see the dark side of this financial steroid.

        That first quarter would have missed by a couple of cents more! Watch those accounting changes when trying to see how management is performing.

        Here's the description from the 10Q:

        >>>During the first quarter of 2008, we began estimating the cost of our purchases of high frutose corn syrup (“HFCS”) using the actual cost of purchases made to date (including estimated rebates) rather than an average expected cost for the full year. This change was made due to the fact that our supplier began making additional information available to us regarding the actual cost of our HFCS purchases. As a result of this change, our costs of sales during the first quarter of 2008 were reduced by approximately $14 million. We estimate that this change will reduce our cost of sales by approximately $8 million in the second quarter of 2008, and will increase our costs of sales in the third and fourth quarters by approximately $4 million and $18 million, respectively. <<<

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