Coca-Cola Enterprises Inc. reported a loss of $1.1 billion for 2006 and said Tuesday that it would cut 3,500 jobs as its costs rise and Americans drink less soda.
The Coca-Cola bottler took a $2.9 billion charge for writing down the value of its franchise licenses, a noncash item that resulted in the Atlanta company's loss. Revenue rose 6 percent for the year to $19.8 billion. But CCE said higher prices for aluminum cans and corn syrup used in its drinks will push the company's profit, before this year's write-off, down 5 percent to 10 percent in 2007. The company said while its North American cost of sales rose an average of 2.5 percent a year since 2001, these costs will jump 9 percent in 2007.
"In 2007, we will strive to deliver the best results possible as we work through unprecedented cost pressures in North America that will limit our earnings performance," said John Brock, chief executive.
To respond, CCE will eliminate 3,500 jobs, about 5 percent of its global work force, and take a charge of about $300 million during the next two years. CCE said it raised prices per case about 2.5 percent in North America last year.
Coca-Cola Enterprises shares closed Tuesday up 2 percent.
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