Ahead of the Bell: Coca-Cola Enterprises

NEW YORK (AP) -- Gains from bottler Coca-Cola Enterprises Inc.'s deal to distribute Coca-Cola Co.'s Glaceau products could be partially offset by agreements to invest in the beverage brands, analysts said.

Coke, the world's largest beverage maker, on Thursday said it reached agreements with its bottlers to distribute Glaceau's products, which include Vitaminwater. Coca-Cola completed its $4.1 billion purchase of Glaceau in June.

Banc of America Securities analyst Bryan Spillane said the agreement will make it easier for the bottler to meet its long-term growth objectives, since it will be distributing about 50 percent of Glaceau's total volume.

But the analyst said the financial boost to Coca-Cola Enterprises will probably be moderated since the bottler agreed to reinvest some profit into brand building for Glaceau and other Coke products.

The analyst said the agreement, which should take effect in November, could add more than $500 million to the bottler's 2008 sales.

Spillane rates Coca-Cola Enterprises at "Neutral" with a $25 target price.

Goldman Sachs analyst Judy E. Hong said investors might be expecting more immediate growth from the new business. She expects the additional business to contribute about 5 cents per share to Coca-Cola Enterprises' 2008 earnings, which she estimates will total $1.45 per share.