DOW JONES NEWSWIRES
Pepsi Bottling Group Inc.'s (PBG) fiscal third-quarter earnings
rose 9.9%, aided by one-time net gains in the quarter, one of its
last as an independent company.
The company and peer PepsiAmericas Inc. (PAS) are being acquired
by PepsiCo Inc. (PEP) for a combined $7.8 billion. After the deal
is completed, Pepsi Bottling Chief Executive Eric J. Foss will head
a new unit that will account for about three-quarters of PepsiCo's
North American bottling volume.
While soda companies have struggled with weakened volume for
some time, signs began to emerge in recent months that the worst
impact from the recession may have passed. Foss on Tuesday said
easing commodity costs and negative effects from currency exchanges
drove sequential improvements in the company's performance from the
first half of the year.
For the quarter ended Sept. 5, Pepsi Bottling reported a profit
of $254 million, or $1.14 a share, up from $231 million, or $1.06 a
share, a year earlier. Results for the latest quarter included a
net 8 cents of tax and other gains. The company, in July, predicted
earnings excluding items of $1.03 to $1.08.
Revenue decreased 5% to $3.63 billion, but rose 2% excluding
currency effects. Analysts polled by Thomson Reuters projected
revenue of $3.73 billion on average.
Gross margin fell to 44.6% from 45.5%.
Total case volume declined 2% as U.S. and Canada volume fell 1%,
European volume fell 5% and Mexico volume rose 1%. The total volume
declines were smaller than first-quarter and second-quarter drops
of 5% and 4% respectively, as well the prior-year period's decline
of 6%.
Shares of Pepsi Bottling, which confirmed its 2009 earnings
forecast, closed Monday at $37.31 and didn't trade premarket. The
stock is up 66% this year amid the impending takeover.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com