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PepsiCo offers downbeat profit outlook


October 14, 2008
By The Associated Press

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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.

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.

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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.


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