* Q3 adjusted EPS $0.23 vs estimates of $0.21
* Revenue up 21 percent, North America volumes rise
* Says commodity inflation a concern in 2011
* Shares up 4 percent (Adds conference call details, analyst’s comment. In U.S. dollars unless noted)
TORONTO, Nov 4 (Reuters) - Canadian soft-drink maker Cott Corp BCB.TO reported third-quarter results that beat market expectations on Thursday, and said new business wins and an improved promotional environment boosted North American volumes. Its shares rose 4 percent.
Cott, which makes own-brand soft drinks, had been grappling with declining sales in North America due to tough competition in a carbonated soft drinks market dominated by Coca-Cola KO.N and Pepsi-Cola PEP.N, both heavy advertisers.
Adjusted to exclude the August acquisition of Cliffstar Corp, the largest private-label maker of fruit juices in North America, Cott said it earned 23 cents a share, topping analysts’ average forecast of 21 cents a share.
Revenue for the company, a soft drinks supplier to retailers like Wal-Mart WMT.N and Safeway SWY.N, rose 21 percent to $491 million in the quarter.
Analysts on average had expected revenue of $482.6 million, according to Thomson Reuters I/B/E/S.
Cott said the increase in revenue was driven by higher volumes in Canada, the United States and Mexico as well as a positive price mix in the United Kingdom on growth in the energy and sports drink categories.
Cott, which operates soft drink, juice and other beverage bottling facilities in the United States, Canada, Britain and Mexico, said North American revenue was up 31 percent.
“Unlike soft drinks, where 70 percent of the market is controlled by two players, the juice market offers a far less concentrated industry, with 12 players sharing 70 percent of the market. We anticipate Cott to gain market share in this segment,” UBS analyst Kaumil Gajrawala said in a note.
Analysts had said Cliffstar deal was a “transformational move for Cott”, reducing its reliance on Wal-Mart and its exposure to the impact of Coke and Pepsi. [ID:nN08210569]
Cott’s third-quarter net income fell 40 percent to $8.3 million, or 9 cents a share, from $13.9 million, or 18 cents, a year earlier, reflecting expenses related to the Cliffstar acquisition.
The company is concerned about rising prices for fruit and juice, its largest commodity.
“We expect individual cost movements by fruit to be passed through to the consumer pricing, with specific inflation on some fruits, which is apple, as well as reduction on others, such as cranberries,” the company said.
Cott said it was also watching prices for corn and aluminum, and said higher aluminum prices will impact its remaining stock exposure for next year.
Shares of Mississauga, Ontario-based Cott, which markets beverages in more than 50 countries, were up 32 Canadian cents at C$8.43 on Thursday morning on the Toronto Stock Exchange.
The stock has gained about 38 percent since July 7, when the company said it would buy Cliffstar Corp. ($1=$1.00 Canadian) (Reporting by Bhaswati Mukhopadhyay; editing by Janet Guttsman)