US: PBG bullish on flat start to 2007
The Pepsi Bottling Group has posted a reasonably flat start to 2007.
The US-based bottler said yesterday (24 April) that sales in the first quarter of 2007 rose by 4% year-on-year, totalling US$2.5bn. Net income, however, slid from $34m to $29m, as a $4m non-cash expense for "accounting for uncertainty in income taxes" made its presence felt.
While volumes in the US declined by 1%, European volumes were up by 8% driven by a more than 20% improvement in Russia. In Mexico, volumes were down by 3%.
"We are very pleased with our performance for the quarter," said Eric Foss, PBG's president and CEO. "Each of our geographic segments did an excellent job of managing through a very challenging input cost environment. We successfully executed our revenue and margin management strategy, which improved our gross profit per case."
The company also realised its planned productivity initiatives, Foss noted.
"Although the key summer selling season is before us, our strong start to the year coupled with our consistent track record gives us confidence in our full-year outlook," he concluded.
The company affirmed its full-year reported diluted EPS guidance range of $1.90 to $1.98, which already includes the non-cash expense.
Last month, PBG announced that it has created a joint venture in Russia with PepsiCo. The division, which will be called PR Beverages, will be governed by a board of directors representing the two companies equally.
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