Coca-Cola Enterprises Falls After Warning

ATLANTA – Coca-Cola Enterprises Inc. (CCE), the No. 1 U.S. soft drink bottler, Thursday said its earnings would miss analysts' forecasts because of weaker-than-expected shipments in Europe, sending its shares down nearly 9 percent.

The company said European demand has suffered from slow retail trends and unseasonable weather.

Coca-Cola Enterprises said third-quarter earnings would come in below the analysts' average forecast of 51 cents a share.

The Atlanta bottler forecast full-year earnings in the "low to mid-$1.30" range, excluding the impact of Hurricane Katrina (search), which may include lost sales in New Orleans, employee and disaster relief efforts and a short-term increase in cost of sales.

"Today's news can only be considered a negative, and improving Europe trends were an element of our investment thesis," analysts at Legg Mason said in a research note. They estimated that Hurricane Katrina would subtract an additional 5 cents a share from profits.

Coca-Cola Enterprises shares slumped $1.92, or 8.7 percent, to $20.18 in midday New York Stock Exchange trade.

The stock was the biggest decliner on the Dow Jones Titans Food and Beverage index, which was down 0.6 percent.

Shares of Coca-Cola Co. (KO) were down 44 cents, or 1 percent, at $44.21.

Mary Minnick, the soft-drink giant's president of marketing, innovation and strategy, would not discuss the bottling company's outlook at an investor conference on Thursday, but said Europe had been weak.

"What's going on in Europe are some large macroeconomic trends," she said in remarks carried on the Internet. "Beverages and soft drinks in general are very soft. We've got a couple of key markets like Germany that we've been very clear about are in the restructuring process."

Coca-Cola Enterprises said it expects shipment volumes to be flat or to grow no more than 1 percent both for the third quarter and the full year.

In Europe, the company sees volumes declining 3 percent to 4 percent in the third quarter and 1 percent to 2 percent for the year. In North America, it expects increases of 1 percent to 2 percent for the quarter and 1 percent for the year.