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