PURCHASE, N.Y. — With easing volume in the North American carbonated soft drink market and general economic conditions as factors, net income for PepsiCo, Inc. was down 10% for the third quarter ended Sept. 6.
Income for the quarter was $1,576 million, equal to 99c per share on the common stock, compared with $1,743 million, or $1.06 per share, during the same quarter of the previous year. Net revenue for the quarter was $11,244 million, up 11% from $10,171 million during the same quarter of the previous year.
"In the third quarter our worldwide snacks and international beverage businesses performed well once again," said Indra Nooyi, chairman and chief executive officer. "We had solid top- and bottom-line results in the face of a challenging macro environment and the most difficult quarterly comparisons on commodity cost inputs. We were adversely impacted by continued weakness in the U.S. liquid refreshment beverage category, which resulted in disappointing performance in our domestic beverage business. We are taking important steps to revitalize our beverage portfolio."
For the nine months ended Sept. 6, PepsiCo posted income of $4,423 million, or $2.74 per share, up slightly from $4,396 million, or $2.64 per share, during the same period of the previous year. Revenue for the nine months was $30,522 million, up 13% from $27,128 million during the same period of the previous year.
The company also announced it will be cutting about 3,300 positions as a part of a productivity program. About 40% of the eliminated positions relate to the closing of up to six plants and other capacity rationalization actions to be announced by the end of the year.
Pepsi also said it anticipates full-year 2008 earnings per share to be in the range of $3.41 to $3.44 and the recent surge of the U.S. dollar will have an adverse impact on fourth-quarter earnings.
"While we can’t control the macro economic situation, we can enhance PepsiCo’s operating agility to respond to the changing environment," Ms. Nooyi said. "To do so, we are implementing a broad-based productivity program, which we expect will produce $1.2 billion in pre-tax savings over three years. The majority of the savings will be invested in our businesses. A primary focus will be restoring growth to our North American beverage business. At the same time, we will increase our investment in developing markets, make selective investments to continue growing our global snacks business and accelerate our global R.&D. initiatives to help secure our future innovation pipeline."