US: PBG thanks early Easter for steady Q1

By | 23 April 2008

The Pepsi Bottling Group has reported a slight slip in net income for the first quarter, despite a rise in sales.

The largest manufacturer, seller and distributor of Pepsi-Cola beverages said today (23 April) that net income for the first three months of 2008 came in at US$28m, compared to $29m in the corresponding quarter a year earlier. Net profit included a net charge of $2.5m from restructuring charges and an asset disposal charge, all of which were initiated in 2007, the company said.

Total sales rose by 7% year-on-year, coming in at $2.65bn.

In the US and Canada, physical case volumes inched up by 2% as the company benefited from the early Easter holiday this year. European volume grew by 7%, driven by double-digit growth in Russia and positive performance in the balance of the countries. In Mexico, volume improved 2%.

Reported worldwide operating income for the first quarter declined 10% versus the first quarter of 2007 to $108m, reflecting a 3%-age point decline from foreign exchange, a 4%-age point negative impact from consolidation of the Russian joint venture and a 2%-age point reduction from the restructuring and asset disposal charges.

The company also said that it has repurchased around 5m shares of its stock in the three-month period.

"The first quarter marked a solid start to the year, as we exceeded both our worldwide profit and earnings per share objectives," said PBG's president and CEO Eric Foss. "The diversity and strength of our geographic portfolio, combined with significant cost productivity gains, helped offset a challenging macroeconomic environment in the US. We also remained committed to investing for future growth, announcing two acquisitions that will enhance our competitive position in Russia and unlock new opportunities to expand our international business.

Looking forward, the company said it expects to achieve top-line growth of about 6% to 7% in 2008. PBG's comparable operating profit is expected to grow 4% to 6% for the year.

"Our focus in the second quarter and beyond is on improving our profitability in the US and Canada, capturing the growth potential in Europe, and building upon our encouraging progress in Mexico," Foss continued. "I believe we have the right plans in place to continue to deliver long-term growth and create shareholder value."

Sectors: Soft drinks, Water

Companies: PBG, Pepsi-Cola

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