PepsiAmericas, the number two Pepsi bottler, reported a 60% jump in fourth-quarter net income helped by acquisitions, volume growth in Central Europe and a weaker US dollar, but forecast fiscal 2008 profit below Wall Street view.
The company forecast fiscal 2008 earnings per share of $1.77 a share to $1.83 a share, short of analysts’ expectations of $1.89 a share for the same period.
Minneapolis based PepsiAmericas has followed a strategy of inorganic growth and has pursued deals in Central and Eastern Europe in an effort to capture a share of the rapidly growing markets in these regions.
“Consistent execution on all parts of our strategy drove our strong performance in 2007,” said PepsiAmericas Chairman and CEO Robert Pohlad.
The company earned $42 million, or 32 cents a share, for the quarter, versus $26.1 million, or 20 cents a share, a year earlier. The current quarter included a charge of $0.1 a share.
Analysts were expecting a profit of $0.33 a share, before special items, according to Reuters Estimates.
Revenue for the quarter rose to $1.1 billion, in line with Wall Street estimates.
Volume growth in the United States continued to decline this quarter but a net pricing growth of 3.8% helped sales growth. Central European volume grew 56.1%.
Pohlad comments: “Central Europe continues to be our strongest contributor as we capture the topline growth opportunities in our increasingly diverse portfolio of markets.
“Investments in selling resources, brand building, and an expanding product portfolio drove volume growth ahead of the overall category, led by double digit volume gains for the year in our major markets, Romania and Poland.
“Along with acquisitions and foreign currency benefits, our Central European business delivered operating profits over $100 million, over four times that of the prior year.”
Net sales in the U.S., which were about 71% of the company’s total for the quarter, rose 4% to $812.2 million.
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