Pepsi Bottling Loses Fizz after Profit Warning
Pepsi Bottling Group's (PBG) share price fell on Dec. 20, after the beverage company announced that its profits in 2007 will be lower than expected amid daunting costs.
The Somers (N.Y.)-based company, in which PepsiCo (PEP) holds about a 47% voting interest, must buy things like sweetener and aluminum to make its products, and prices for some of its key production inputs have moved higher.
The company said its diluted earnings per share (EPS) are expected to be in the range of $1.92 to $2.00 in 2007. The mean analyst estimate had been for $2.05 per share, according to the San Francisco research firm StarMine, which aggregates data from Thomson Financial.
PBG also affirmed its full-year 2006 forecast of EPS between $1.90 and $1.93, including the impact of things like tax law and accounting changes. The mean analyst for 2006 had been for $1.88 per share, according to StarMine.
"This has been a great year for PBG. We're going to finish 2006 with the strongest and most balanced top-line performance ever, with each of our geographic segments contributing to our growth," CEO Eric J. Foss said in a press release Dec. 20. ""The major challenge in front of us is significant increases in the cost of raw materials."
Investors sold Pepsi's stock 0.5% to $31.48 per share in early afternoon trading on the New York Stock Exchange.