The market tasted then rejected the first half earnings upgrade from Coca-Cola Amatil.
But Qantas managed to slip an upgrade into the market, almost unnoticed (See story below).
Coca-Cola Amatil said in a statement to the market that earnings before interest and tax would probably rise 12 per cent in the six months ending June 30.
The company had previously forecast first-half profit growth in the "high single digits''. That grabbed the market's attention at first but investors then focused on the forecast for the second half.
And that seems to be suggesting a slowing in the pace of earnings growth to the 'high single digits'
The shares rose 9c to $9.27, then fell 28c to close at $8.99 (admittedly in a down market) as investors realised the earnings guidance for the second half was lower than for the first half.
On top of that, there seems to have been a sales and earnings downturn in the company's troubled South Korean business, which CCA is looking to sell.
The company said bids for that business had been received and were being evaluated. The market had been hoping for news on a sale and a price.
"South Korea continues to be impacted by the reduced demand following the extortion threat in July 2006. Coupled with reduced volume achieved during the sale process, this has impacted on operating performance in the first half 2007, " the company said in the statement to the ASX.
These less than impressive results in South Korea might indicate that the company's hopes for a good price will have to be lowered.
But elsewhere the company was upbeat; "Coca-Cola Amatil continues to experience good trading conditions across most markets,'' the company said in the statement. "The key priority for the business continues to be the recovery of commodity driven cost-of-goods increases.''
CCA said second-half profit was expected to rise in the "high single digit'' range with commodity costs still expected to increase by between 4 per cent and 5 per cent.
Here's what the company said yesterday:
Based on the current strong trading performance in our key Australian and New Zealand markets, and the continuing improved results in Indonesia, CCA expects to deliver approximately 12% EBIT growth for the first half of 2007 versus previous first half guidance of high single digit EBIT growth.
South Korea sale process
Second round offers for the sale of the South Korean business have been received and negotiations are continuing with the preferred bidders.
Trading review
CCA continues to experience good trading conditions across most markets. The key priority for the business continues to be the recovery of commodity driven cost of goods increases through management of the key variables of volume, price and mix to drive improvement in operating margins.
Australia
The momentum established by the Australian business during the second half of 2006 has continued in the first half of 2007 with the business maintaining solid price per unit case realisation. Volumes have been maintained in line with 2006, which is a strong outcome given the cycling of the successful launch of Coke Zero in the first half of 2006.
New Zealand & Fiji
New Zealand continues to show a strong recovery in earnings following a challenging first-half 2006. The business is achieving good price per unit case realisation, offsetting commodity-driven cost of goods sold increases. Volumes are in line with the prior comparable period, again cycling the launch of Coke Zero in the first half of 2006.
Indonesia & PNG
The Indonesian & PNG region is experiencing good demand with strong volume growth and price per unit case realisation. This will deliver a material improvement in performance in the first half of 2007.
South Korea
South Korea continues to be impacted by the reduced demand following the extortion threat in July 2006. Coupled with reduced volume achieved during the sale process, this has impacted on operating performance in the first half 2007.
SPC Ardmona
Notwithstanding the earnings impact of the 2006 frost damage and continued input cost pressures, the first half 2007 result is expected to be broadly in line with first half 2006 and a modest earnings improvement is expected for the full year.
Pacific Beverages
Pacific Beverages continues to perform well with strong customer support for the Joint Venture's premium beer brands of Peroni, Pilsner Urquell and Miller Genuine Draft. The integration of the Maxxium business has also progressed smoothly. Strong trading momentum post-Easter has been maintained into the second quarter 2007.
2007 second half guidance maintained
Second half 2007 guidance of high single-digit EBIT growth is maintained. Commodity driven cost of goods sold increases of approximately 4% – 5%, on a currency-neutral basis and excluding mix change in South Korea, are expected to continue at a similar level in the second half of 2007.
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Qantas quietly upgraded its profit outlook for a fourth time this financial year yesterday, again underling just how much the failed $11.1 billion bid from Airline Partners Australia undervalued the company.
The airline slipped the upgrade out at the bottom of a statement confirming it had quit its 4.2 per cent holding in Air New Zealand.
Qantas was reluctant to draw attention to the latest upgrade,which came three days before the end of the financial year on Saturday,and two months since the collapse of the Macquarie Bank-led offer of $5.45 a share
At the bottom of the statement confirming the sale of the AIZ stake, the airline's chief financial officer,Peter Greggsaid that "following the sale of the shares, Qantas remained comfortable with its previous gui
