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US: Cott beats expectations in Q3, increases earnings guidance

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The world's largest producer of own-brand soft drinks Cott Corp beat analysts estimates with a strong rise in third-quarter profits on Wednesday. The company reported that net sales for the third quarter increased to US$338.8m, up 12% over sales of US$302.5m reported in the same quarter last year.

Earnings per diluted share rose by 75%, reaching $0.28 vs. $0.16 per diluted share last year. Operating income for the quarter was US$39.1m, climbing 49% from operating income of US$26.2m reported in the same period of 2001, as the Company benefited from improvements in volume and operating efficiencies.
 
Frank E. Weise, chairman, president and chief executive officer, said: "We are on track to meet our targets for the year, showing steady progress on our strategic plan for growth in both sales and earnings. During the third quarter, we expanded our business with key accounts as the Cott combination of value and quality continues to fuel our growth with pre-eminent retailers whose brands have proven consumer appeal."

"The quarter was also significant in unique ways. On July 30, we listed Cott shares on the New York Stock Exchange, providing new prominence for the Company and improved access for our shareowners," Weise pointed out. "We also took our first steps toward developing a retailer-brand beverage market for Cott in Mexico by investing in a new joint venture that will help us position the Company for promising growth."

Overall, sales were up 12% for the quarter, up 5% excluding the impact of acquisitions and a decline in sales to K-Mart. In the United States, sales totalled US$247.9m compared with US$214.5m a year ago, a rise of 16%. Sales in Canada rose by 5% to US$46.1m.
 
However, Cott said sales in the United Kingdom and International segment were US$40.6m, an 8% decline, "as this business begins to achieve its profitability goals."
 
Commenting on expectations, Weise indicated that the company has increased the full year earnings guidance to US$0.79 - US$0.81 per diluted share before extraordinary items and change in accounting principle.

He also reaffirmed the company's earlier estimates that sales are expected to grow at 8-10% for the year; EBITDA is expected to total about US$160m; and capital spending is expected to range between US$45-$50m in 2002.


Companies: Cott Corporation

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