PepsiCo announced a sweetened $7.8 billion offer for its two largest bottlers, Pepsi Bottling Group and PepsiAmericas. The acquistion is expected to save the combined companies over $300 million by 2012.
PepsiCo announced a $6 billion to buyout shareholders of its two largest bottling operations, Pepsi Bottling Group and PepsiAmericas in a combined cash and stock deal. The acquisitions would give PepsiCo control of 80% of its North American distribution, and add $200 million to the company's annual pretax profit.
A Credit Suisse analyst reiterated his "outperform" rating for Pepsi, writing that the recession will help the company gain market share from weak competitors in the key Mexican and UK markets. Additionally, the company was added to Credit Suisse's "US Focus List."
Pepsi took $700 million in charges for restructuring and impairment, dropping quarterly earnings from $1.26 billion a year ago to $719 million. Revenue grew 3% to $12.73 billion.
Pepsi posted a 9.6% decrease in third-quarter net income to $1.58 billion as consumers in its core North American market pulled back on purchases even in the typically recession proof drink and snack markets.
Pepsico profit rose to $1.7B from $1.56B in the year before period. An anemic North American market was offset by strong overseas growth where PepsiCo International saw revenue jump more than 20%.
Pepsico posted a 4.7% rise in first-quarter net income, as continuing volume growth in Asia helped it overcome soaring commodity costs and the weak economy. Faced with rising costs of vegetable oils, grain and other commodities -- Pepsico reported net income of $1.15 billion while net revenue rose 13% to $8.33 billion from $7.35 billion. Gross margins fell to 54% from 55.3%.
Pepsico reported continued strong operating performance in the fourth quarter of 2007. Net revenue increased 17% in the quarter and reported operating profit increased 9%; core division operating profit, excluding restructuring items, increased 11%.
Macroeconomic fears surrounding rising commodity costs and a weakening U.S. economy scare investors from Pepsi which makes two thirds of its revenues domestically.
Pepsi reports solid Q3 earnings achieving 10% net revenue, 10% division operating profit growth and 14% core EPS growth.
Moody's (NYSE:MCO) upgraded its rating of PepsiCo one notch, citing PEP's strong financial performance and debt protection measures as reasons for the upgrade.
Fitch Ratings, a major international credit rating agency, reaffirmed its high rating for both PepsiCo and two of its major bottlers, Pepsi Bottling Group (NYSE:PBG) and PepsiAmericas (NYSE:PAS).
Pepsi announced its expectations for revenue and volume growth in fiscal year 2007, as well as approximately $3.3 billion in share repurchases.