Pepsi Bottling Group Inc. PBG.N on Tuesday said quarterly profit rose by 2 percent, hurt by weak sales and disappointing profitability at its Mexican operations.
The results were in line with expectations but the poor performance of the company's trademark Pepsi-Cola brand is a concern, Credit Suisse First Boston analyst Andrew Conway said.
The company, the largest bottler of Pepsi drinks, said earnings rose to $183 million, or 67 cents a share, in the fiscal third quarter ended Sept. 6, from $178 million, or 61 cents a share, a year earlier. Revenue rose to $2.81 billion from $2.46 billion.
Analysts surveyed by Reuters Research had expected the company to earn between 65 cents and 68 cents a share, with a mean estimate of 66 cents a share.
Worldwide sales volume, a key measure of health in the beverage industry, was flat for the third quarter. But new products such as Mountain Dew LiveWire and Pepsi Vanilla performed strongly, Chief Executive John Cahill said in a statement.
Despite sluggishness in third-quarter sales volume, there should be growth in the coming year because the weak sales numbers posted in 2002 should be easy to beat, Legg Mason analyst Mark Swartzberg said.
"When we have this conversation in three months, we will be looking at North American volume that is positive," Swartzberg said.
The improvement should come from the United States, Pepsi Bottling's main business which had flat sales volume in the third quarter, while Mexico remains a concern for the company, Swartzberg added.
Looking ahead, the Somers, New York, company affirmed the full-year outlook it gave earlier this month for earnings of $1.55 to $1.57 per share. On Sept. 3 the company had lowered its outlook from its prior forecast for earnings of $1.61 to $1.67 per share.
Analysts, who had ratcheted down their estimates in light of the company's revised estimates, now expect Pepsi Bottling to report $1.55 per share, on average, according to Reuters Research.
The company expects to generate cash from operations of about $1 billion this year, and forecast capital expenditures of about $675 million.
For the year, its worldwide sales volume, measured on a constant-territory basis, is expected to be little changed from the year before.
Pepsi Bottling shares closed Monday at $20.99 on the New York Stock Exchange, down 3 cents on the day.
The results were in line with expectations but the poor performance of the company's trademark Pepsi-Cola brand is a concern, Credit Suisse First Boston analyst Andrew Conway said.
The company, the largest bottler of Pepsi drinks, said earnings rose to $183 million, or 67 cents a share, in the fiscal third quarter ended Sept. 6, from $178 million, or 61 cents a share, a year earlier. Revenue rose to $2.81 billion from $2.46 billion.
Analysts surveyed by Reuters Research had expected the company to earn between 65 cents and 68 cents a share, with a mean estimate of 66 cents a share.
Worldwide sales volume, a key measure of health in the beverage industry, was flat for the third quarter. But new products such as Mountain Dew LiveWire and Pepsi Vanilla performed strongly, Chief Executive John Cahill said in a statement.
Despite sluggishness in third-quarter sales volume, there should be growth in the coming year because the weak sales numbers posted in 2002 should be easy to beat, Legg Mason analyst Mark Swartzberg said.
"When we have this conversation in three months, we will be looking at North American volume that is positive," Swartzberg said.
The improvement should come from the United States, Pepsi Bottling's main business which had flat sales volume in the third quarter, while Mexico remains a concern for the company, Swartzberg added.
Looking ahead, the Somers, New York, company affirmed the full-year outlook it gave earlier this month for earnings of $1.55 to $1.57 per share. On Sept. 3 the company had lowered its outlook from its prior forecast for earnings of $1.61 to $1.67 per share.
Analysts, who had ratcheted down their estimates in light of the company's revised estimates, now expect Pepsi Bottling to report $1.55 per share, on average, according to Reuters Research.
The company expects to generate cash from operations of about $1 billion this year, and forecast capital expenditures of about $675 million.
For the year, its worldwide sales volume, measured on a constant-territory basis, is expected to be little changed from the year before.
Pepsi Bottling shares closed Monday at $20.99 on the New York Stock Exchange, down 3 cents on the day.
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