PepsiCo Inc. (NYSE:PEP) will announce third-quarter earnings on Thursday at 7 a.m. ET. Analysts expect the food and beverage company to announce earnings of $1.02 per share on revenue of $11.26 billion, according to Thomson Reuters. Those numbers are slightly higher than the $1.01 per share earnings and revenue of $11.24 billion in the same quarter last year.
The Purchase, N.Y.-based company accomplished its goal of acquiring two of the largest Pepsi bottling companies on Aug. 4. Pepsi purchased Pepsi Bottling Group Inc. (NYSE:PBG) and Pepsi Bottling Americas Inc. (NYSE:PAS) for $7.8 billion in cash-and-stock deals. (Subscribers to The Deal Pipeline can read more here.)
The two companies were originally spun off, but PepsiCo felt rolling up the companies would be more beneficial: Adding the bottling companies would create annual savings of $300 million by 2012 as a result of cost efficiency and what the company called "improved revenue opportunities." Meanwhile, PepsiCo expects the deal to add 15 cents a share to its bottom line. Pepsi Bottling Group impressed the market
Tuesday when it posted a 10% jump in third-quarter earnings, with
profit of $254 million, or $1.14 a share. This compares with a profit
of $231 million, or $1.06 a share, in the year-ago period.
In a smaller deal on Aug. 12, PepsiCo agreed to acquire Amacoco Nordeste Ltda. and Amacoco Sudeste Ltda., Brazil's largest coconut water company. (Subscribers to The Deal Pipeline can read more here.)
The August additions are moves by PepsiCo CEO Indra Nooyi to diversify her company's earnings as well as provide a jolt to flattening soft drink sales.
Pepsi has already made plans to combine the two bottling units and create PepsiCo Bottling North America and appoint Eric Foss its new CEO. Foss is a 27-year food and beverage veteran, moving from his latest stint as chairman and CEO of Pepsi Bottling Group. - Gerald Magpily
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