PepsiCo earnings top Wall Street forecast

PURCHASE, N.Y., Wed Jul 25, 2012 – PepsiCo Inc. reported a higher-than-expected quarterly profit on Wednesday, helped by price increases, and stood by its full-year outlook.
That the maker of Diet Pepsi, Frito-Lay snacks and Tropicana orange juice did not cut its outlook was viewed as a sign of strength at a time when many consumer products companies are suffering from a weak global economy.
“In a consumer group seeing negative second-half revisions, we consider this positive,” said Stifel Nicolaus analyst Mark Swartzberg.
PepsiCo said second-quarter net income had fallen to $1.49 billion, or 94 cents per share, from $1.89 billion, or $1.17 per share, a year earlier.
Excluding items, earnings were $1.12 per share, topping the analysts’ average estimate of $1.09, according to Thomson Reuters I/B/E/S.
Revenue fell 2 percent to $16.5 billion, in line with Wall Street estimates.
The decline resulted in part from a loss of revenue in China and Mexico after the company sold the bottling operations in those countries to franchisees. The stronger U.S. dollar, which reduces the value of overseas revenue, also cut into sales.
Excluding those items, organic revenue rose 5 percent, with contributions of 1 percentage point from volume and 4 percentage points from price increases.
Volume rose 6 percent in the snack business and 1 percent for the beverage business. In the Americas, volume rose 5 percent in snacks and fell 1 percent in beverages. In Europe, volume rose 1 percent in snacks and fell 2 percent in beverages.
The company affirmed its 2012 outlook, which calls for earnings per share to fall 5 percent from the $4.40 it earned in 2011. It expects revenue to grow by a mid-single-digit percentage rate, excluding the reduction from refranchising its businesses in China and Mexico.

PepsiCo, Coke Enterprises beat Wall Street forecasts

NEW YORK, Thu Apr 26, 2012 – PepsiCo Inc. and Coca-Cola Enterprises reported higher-than-expected quarterly profits and stood by their full-year forecasts, helped by price increases on sodas.

Like most food and beverage companies, PepsiCo and Coke Enterprises raised prices to offset higher commodity costs. But those price increases can often hurt sales volume.

PepsiCo said net income was $1.13 billion, or 71 cents per share, in the first quarter, down from $1.14 billion, or 71 cents per share, a year earlier.

Excluding items, earnings were 69 cents per share, in line with management’s expectations, but 2 cents ahead of analysts’ estimates, according to Thomson Reuters I/B/E/S.

Net revenue rose 4 percent to $12.43 billion, driven by price increases. Currency exchange rates reduced revenue growth by 1 percentage point.

Volume rose 2 percent in the company’s Americas Foods unit as strength in Latin America offset declines at the North American units of Frito-Lay and Quaker Foods. The Americas Beverages unit’s volume fell 1 percent.

The company stood by its 2012 outlook, which calls for earnings to fall 5 percent from the $4.40 per share reported for 2011. PepsiCo expects net revenue growth in the low single-digit percentage range for this year.

For PepsiCo, 2012 is a transition year as it ramps up marketing, cuts thousands of jobs and streamlines its portfolio in a bid to improve performance, especially in its North American drink business.

The company has lagged Coca-Cola Co as even its flagship Pepsi-Cola has fallen to No. 3 among soft drinks in the United States, behind Coca-Cola and Diet Coke.

Also on Thursday, Coke Enterprises reported first-quarter earnings of 36 cents per share, topping the analysts’ average estimate of 33 cents, according to Thomson Reuters I/B/E/S.The company, which bottles Coca-Cola Co drinks in Europe, also affirmed its full-year forecast for earnings per share to rise about 10 percent.

PepsiCo to cut 8,700 jobs in 30 countries, invest in brands

PURCHASE, N.Y. – PepsiCo Inc. expects to cut 8,700 jobs as part of a plan to save an extra $1.5 billion over the next three years, as it pours more money into its brands.

Its shares fell 1.1 percent to $66 in premarket trading from Wednesday’s close of $66.74 on the New York Stock exchange.

PepsiCo, maker of Sierra Mist soda, Tropicana juice and Gatorade sports drink, also reported better-than-expected fourth-quarter profit and forecast a 5 percent decline in 2012 earnings as it increases advertising and marketing by $500 million to $600 million.

The investment will be focused on 12 brands, including Pepsi-Cola, Lay’s, Gatorade, Tropicana, Doritos and 7-UP. It is trying to improve performance in North America, where it lags behind archrival Coca-Cola Co.

For 2013, PepsiCo expects earnings to grow at a high-single-digit rate.

The job cuts will occur in 30 countries, PepsiCo said.

The $1.5 billion in extra savings is in addition to $1.5 billion it already planned to save over that period.

PepsiCo directors warm to splitting company-report

PURCHASE, N.Y. ― Some members of PepsiCo. Inc’s. board want to take a closer look at splitting up the snack and beverage units, a move that its chief executive officer is against, the New York Post reported, citing a source close to the situation.

“I hear there is going to be a shake-up,” the source said, according to the newspaper report.

Another source quoted by the paper said CEO Indra Nooyi is close to announcing two big acquisitions, which are believed to be international, and which could be big and interesting enough to boost the company’s stock.

The report comes days after activist investor Nelson Peltz’s Trian Fund said it had taken a 2.36 million-share stake in PepsiCo, where Nooyi is under pressure from many on Wall Street to split up the company or make other big changes.

Since then, the shares have been rising. They were up another 3.1 percent at $66.49 in morning trading on Wednesday.

PepsiCo management said in October that it had considered breaking up the company, but did not find that to be in the best interests of shareholders.

Then, last week, PepsiCo said its board and management would extend their review of ongoing business plans for 2012 and beyond, raising hopes of more drastic measures to reignite its sagging performance.

A PepsiCo spokesman was not immediately available for comment on Wednesday morning.

The newspaper reported that another source close to the situation said that PepsiCo “might still split, despite Indra saying they will not do so.”

The New York Post also reported that an investment banker told dealReporter that one breakup scenario would involve Nooyi running PepsiCo’s international business while “internal candidates” run the U.S. beverage and snack part of the business.

PepsiCo shakes up North America drinks unit management

PURCHASE, N.Y. ― PepsiCo Inc. announced a management shake-up on Wednesday that includes the departure of bottling chief Eric Foss and the demotion of Massimo d’Amore, who ran its Americas beverages group.

Those two positions are effectively being combined into one, to be held by Albert Carey, a 30-year PepsiCo veteran who most recently ran its Frito-Lay North America unit. The change is effective immediately.

“We believe this change was necessary and view it favorably,” Credit Suisse analyst Carlos Laboy wrote in a research note.

The departure of Foss — former chief executive of Pepsi Bottling Group, which PepsiCo acquired last year — was expected following the integration of the bottler.

Foss, 53, plans to take a senior leadership role at a public company, PepsiCo said. A spokesman could not provide further details.

Carey will oversee all of PepsiCo’s North American and Latin American beverage businesses. D’Amore has run the businesses since November 2007.

D’Amore will retain responsibility for Gatorade and Tropicana in North America, the Latin American drink business, and the “global beverages group,” which focuses on innovation, research and development and global brand management.

D’Amore will report to Carey, who will report to PepsiCo Chief Executive Indra Nooyi.

Tom Greco will succeed Carey as head of Frito-Lay North America.

PepsiCo shares were up 38 cents, or 0.6 percent, at $60.92 on the New York Stock Exchange.