A Preview Of Coca-Cola European Partners' Q1 Earnings

Coca-Cola European Partners plc CCE or CCEP is set to report first-quarter 2018 results, before the opening bell on Apr 26.
In the last reported quarter, the company delivered a positive earnings surprise of 5.45%. The company surpassed/met the Zacks Consensus Estimate for earnings in the trailing four quarters, the average beat being 6.88%.
Factors at Play
In 2017, CCEP modestly exceeded its initial guidance for revenue, operating profit, earnings per share and free cash flow. The company's continuous focus on brand and packaging innovation, solid revenue per unit case growth (up 200% year over year) in sugar-free portfolio, stronger execution and customer service, and improving operating efficiency helped drive growth.
This has encouraged CCEP to step up investments in brand portfolio, field sales teams, route to market and most importantly, digital capabilities.
In the last reported quarter, the company's net sales increased 12.7% year over year in dollar terms. Comparable revenues in the quarter grew 3.5%. From a brand and volume perspective, CCEP's sparkling portfolio increased 1%, with a 0.5% drop in Coca-Cola trademark brands. Notably, Coca-Cola Zero Sugar continued to perform well, growing more than 15%. Again, energy drinks performed well and were up 15% as the company continued to execute its multi-brand strategy.
Apart from solid revenues, the company's cost-saving plans are helping boost the bottom line. In the fourth quarter, operating expenses contracted 11.5% on a comparable and currency neutral basis. This reflects synergy benefits, volume-related costs, expense timing and continued focus on managing operating expenses. These factors contributed to operating profit growth of 50% on a comparable and currency neutral basis. Comparable earnings jumped 26.1% year over year in the quarter.
We expect the growth momentum to continue in the to-be-reported quarter as well. Importantly, CCEP is on track to achieve pre-tax synergy savings of €315-€340 million by mid-2019.
Overall, for the first quarter, the Zacks Consensus Estimate for earnings is pegged at 39 cents, reflecting a 18.2% year-over-year increase. The consensus estimate for revenues is $3 billion, implying a 19.1% increase.

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