PepsiAmericas 3Q Profit Falls 13% Amid Weak Demand
DOW JONES NEWSWIRES
PepsiAmericas Inc.'s (PAS) third-quarter earnings fell 13% amid foreign-
exchange impacts and weak demand, in what is set to be one of its last quarters
reporting as an independent company.
The results fell short of Wall Street estimates. However, Chairman and Chief
Executive Officer Robert C. Pohlad said, "Given the challenges in our European
business and volume pressures in the U.S., we are satisfied with our performance
this quarter." In Europe, weaker economic trends in Romania hurt results, while
volumes improved sequentially in all other markets, he said. In the U.S., take-
home sales were particularly soft.
The company cut its 2009 earnings forecast to $1.83 to $1.87 a share from its
boosted July forecast of $1.87 to $1.94 a share.
The U.S. bottling industry has struggled with weakening soda sales volume for
some time, with the recession adding to its woes. However, there have been
signs the sector may have already seen the worst of the declines related to the
economic downturn.
PepsiCo Inc. (PEP) agreed in August to pay a combined $7.8 billion for its two
largest bottlers--PepsiAmericas and Pepsi Bottling Group Inc.(PBG)--in an effort
improve distribution and cut costs.
PepsiAmericas reported a profit of $63.5 million, or 51 cents a share, down
from $73.1 million, or 58 cents a share, a year earlier. Excluding item, such as
asset write-downs and prior-year restructuring-related expenses, earnings rose
to 59 cents a share from 45 cents.
Revenue decreased 15% to $1.13 billion, roughly half due to currency changes.
Analysts polled by Thomson Reuters most recently forecast earnings of 62 cents
on revenue of $1.22 billion.
Gross margin rose to 41.2% from 40.8% amid higher prices.
Global volume fell 9%. In the U.S., net sales fell 3% and volume was down 8.9%
, including three percentage points from when Independence Day fell on the
calendar. Carbonated soft-drink volume declined 8%, while noncarbonated drinks
fell 11%.
Central and Eastern Europe sales volume fell 9.3% amid foreign-exchange
effects, but that was a sequential improvement from a 13% drop in the second
quarter. Net sales were down 27%.
Shares closed Tuesday at $29.44 and didn't trade premarket. The stock is up
45% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com
(END) Dow Jones Newswires
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