US: Pepsi Bottling Group raises FY forecast, Q1 profits up

The Pepsi Bottling Group (PBG) has posted an 87% increase in first quarter net income and has raised its full-year earnings forecast.

The US-based soft drinks bottler recorded a net income of US$57m, or 27 cents a share, up from $28m, or 12 cents a share, a year earlier, it said today (22 April). The figure included a net after-tax gain of $36m.

PBG also raised its full-year earnings forecast by US$0.05 to a range of $2.20 to $2.30 a share.

Chief executive Eric Foss said PBG was "off to a good start, despite operating in a challenging environment". The company's recent price increases and restructuring efforts helped earnings last quarter, he said.

Successful execution of the company's global pricing strategy, as well as cost and productivity initiatives, helped the group exceed profit and earnings objectives for the quarter, Foss said.

Revenue fell 5.4% to $2.51bn, hurt by the weak global economy and the strong US dollar.

Volume dropped 5%, in part due to Easter falling in April this year, rather than the first quarter in 2008. European volume fell 16%, while the drop was 3% for the US and Canada.

Earlier this week, PepsiCo launched a US$6bn bid to buy the outstanding shares in PBG and PepsiAmericas.

The move will enable PepsiCo to move products more easily from one distribution system to another, giving it a cost and competitive advantage, the soft drinks giant said.

PBG said today that it has appointed a special committee of independent directors to evaluate the proposal and will "respond in due course".