Oct. 14, 2008, Purchase, N.Y. — PepsiCo Inc. lowered its 2008 profit outlook on Tuesday as the nation's second-largest beverage maker announced a 9.5 percent drop in third-quarter earnings. The company also announced plans to eliminate 3,300 positions globally as part of a three-year cost-cutting plan designed to reinvigorate its ailing soft drinks business in the U.S.

Pepsi noted the recent surge in the U.S. dollar will hurt fourth-quarter profit. At current rates, the incremental impact would be about 4 cents to 5 cents per share. As a result, the company now expects to report 2008 earnings per share of $3.67 to $3.68, compared with prior guidance of $3.72. Analysts expected $3.74 per share for the full year

Pepsi also said that, for the full year, it expects 3 percent to 5 percent sale volume growth and low double-digit net revenue growth.

The company reported net income of $1.58 billion, or 99 cents a share, in the quarter ended Sept. 6, compared with $1.74 billion, or $1.06 per share, a year earlier. It had sales of $11.2 billion in the most recent period, compared with $10.17 billion a year ago. Analysts surveyed by Thomson Reuters, who typically exclude items, expected earnings of $1.08 per share on revenue of $11.2 billion.

Pepsi said Tuesday it expects the cost-cutting program to generate a pretax savings of more than $1.2 billion over the next three years with $350 million to $400 million to be saved in 2009. A chunk of the job cuts will be related to the closing of six plants. The majority of the savings will be invested in brand building, long-term research and development and growth initiatives in key markets, the company said.