US: PepsiAmericas makes downbeat forecast
PepsiAmericas has today (18 September) lowered its forecast on annual earnings per share and blamed higher costs in its US business.
The company, the world's number two Pepsi bottler, said it expected earnings per share of US$1.35-1.39, down from its original forecast of US$1.44-1.49.
Chairman and CEO Robert C. Pohlad said the company had seen "favourable" volume growth in the US during the third quarter of the year but added: "While we remain satisfied with our rate increases, the package mix continues to have a negative impact on our net pricing.
"Our higher margin single-serve volume has not rebounded to expected levels, despite the successful launch of Jazz. And our lower margin take-home packages, especially Aquafina, continue to grow above anticipated rates contributing to lower overall net pricing growth."
Pohlad said the company was looking to boost its presence in the on-premise and expand its portfolio outside carbonated soft drinks.
PepsiAmericas said it expects global volumes to be up 2-3% for the full year with US volumes rising 1-2%. The company will announce its third-quarter figures on 25 October.
Mark Swartzberg, a drinks analyst at US bank Stifel Nicolaus, compared the forecast from PepsiAmericas with Pepsi Bottling's performance so far this year. He said that PBG had posted earnings per share ahead of expectations for the first two quarters of the year.
"We believe today's negative pre-announcement is more a reflection of company fundamentals than an industry trend as PepsiAmericas has struggled to balance its price and volume mix this year," Swartzberg wrote in a note to clients.
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