Tags: PepsiCo Cuts Growth Goal on Higher Ingredient Costs

PepsiCo Cuts Growth Goal on Higher Ingredient Costs

Thursday, 10 February 2011 08:25 AM

PepsiCo Inc. cut its full-year earnings growth target Thursday, citing higher commodity costs, a difficult economy and investments in emerging markets.

The results come a day after rival Coca-Cola Co. surprised the market with sales volume increases in all of its segments.

The maker of Pepsi-Cola and Frito Lay snacks saw its shares fall 1.8 percent in premarket trading, despite posting fourth-quarter sales and earnings that beat Wall Street estimates.

PepsiCo Chief Financial Officer Hugh Johnston told the CNBC cable news channel that the company expects commodity costs to rise 8 percent to 9.5 percent this year, but that PepsiCo will be careful not to raise prices too much to alienate consumers.

PepsiCo said it now expects full-year earnings to grow 7 percent to 8 percent. In October it said it expected growth of 11 to 12 percent, compared with a prior forecast of 11 to 13 percent.

In the fourth quarter, PepsiCo's net income fell 5 percent to $1.37 billion, or 85 cents per share, from $1.43 billion, or 90 cents per share, a year earlier.

Excluding items, earnings were $1.05 per share, topping analysts' average estimate of $1.04 per share, according to Thomson Reuters I/B/E/S.

Its sales jumped 37 percent to $18.16 billion, helped by the acquisition last year of its two largest bottlers. Analysts were expecting revenue of $17.6 billion.

Fourth-quarter volume rose 2 percent for the Americas Foods business and 14 percent in the Americas Beverages business. Including PepsiCo's international businesses, total volume rose 3 percent in snacks and 12 percent in beverages.

Excluding added volume the company took on as part of its bottler acquisition, North American volume rose 1 percent, trailing the 3 percent growth seen by Coca-Cola, which gained market share.

PepsiCo shares fell $1.13 to $63.29 in premarket trading, from Wednesday's close of $64.42 on the New York Stock Exchange. Coca-Cola shares dipped 15 cents to $63.

© 2020 Thomson/Reuters. All rights reserved.


   
1Like our page
2Share
Companies
PepsiCo Inc. cut its full-year earnings growth target Thursday, citing higher commodity costs, a difficult economy and investments in emerging markets. The results come a day after rival Coca-Cola Co.surprised the market with sales volume increases in all of its...
PepsiCo Cuts Growth Goal on Higher Ingredient Costs
315
2011-25-10
Thursday, 10 February 2011 08:25 AM
Newsmax Media, Inc.
 
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved