Page 10 - WEB OCT 7, 2015
P. 10
BUSINESS A25
Wednesday 7 October 2015
Yum’s stock plunges PepsiCo boosted by smaller chip bags, non-soda drinks
after KFC parent’s
PURCHASE, N.Y. (AP) — a volume increase of 3 per- too early to tell how that sults were better than Wall
slow China recovery
Smaller bags of potato cent in the quarter, while sweetener change will Street expected as the
LOUISVILLE, Ky. (AP) —
Shares of Yum Brand chips and drinks that do higher pricing pushed up affect sales of the drink. maker of Quaker Oats and
plunged in late trading
Tuesday after the owner not have Pepsi printed on revenue by 5 percent. Coca-Cola Co., based in Mountain Dew soda hiked
of KFC, Pizza Hut and Taco
Bell cut its profit outlook for them are helping push up Chief Financial Officer Atlanta, reports its third- prices and trimmed costs.
the year, citing a slower-
than-expected comeback PepsiCo’s sales. Hugh Johnston said the quarter results Oct. 21. The company raised its
for its key China division.
The company said it now PepsiCo Inc. said Tues- volume increase in its flag- Meanwhile, CEO Indra 2015 earnings growth tar-
expects full-year earnings
per share to rise in the low- day that snack volume in ship region was driven by Nooyi noted that the bev- get, citing its year-to-date
single-digit percentages.
It had previously forecast North America rose by 0.5 a nearly 10 percent rise in erage industry is shifting results and updated out-
growth of at least 10 per-
cent for the year, based percent for the third quar- non-carbonated drinks, away from sodas to non- look.
on expectations at the
time for a strong recovery ter, while pricing pushed while sodas saw a 1.9 per- carbonated drinks such as For the period, PepsiCo
by its stores in China, which
have been hit by scares earned $533 million, or 36
over food quality.
In the latest quarter, how- cents per share. That com-
ever, the company said
sales in China rose just 2 pares with $2.01 billion, or
percent at established lo-
cations, reflecting a 3 per- $1.38 per share, a year ear-
cent increase at KFC and
1 percent decline at Pizza lier.
Hut. For the full year, the
company said it expects Stripping out one-time
China’s overall sales at es-
tablished locations to be charges, it said earn-
negative. Yum, based in
Louisville, Kentucky, has ings were $1.35 per share,
been trying to win back
customers after negative which was 9 cents better
publicity stemming from
food supply controversies. than Wall Street had ex-
In the year-ago quarter,
sales in China fell 14 per- pected, according to a
cent at established loca-
tions. poll by Zacks Investment
Jonathan Blum, chief pub-
lic affairs officer for Yum Research.
Brands Inc., attributed the
performance in China to Total revenue declined to
a mix of external factors,
such as the Chinese econ- $16.33 billion from $17.22
omy, as well as internal is-
sues, such as the execution billion, stung by the impact
of marketing for Pizza Hut.
He declined to provide fur- of foreign currency transla-
ther details ahead of Yum’s
analyst conference call tion, but was not as bad as
scheduled for Wednesday
morning. Wall Street expected.
In the U.S., Blum said Taco
Bell and KFC saw positive Venezuela, which has
sales gains, while Pizza Hut
remained relatively flat. been trying to get control
For the quarter ended
Sept. 5, the company said Pepsi bottles are on display at a supermarket in Haverhill, Mass. Pepsico reported quarterly finan- of hyperinflation for years,
it earned $421 million, or cial results on Tuesday, Oct. 6, 2015. is using capital controls
95 cents per share. Not in- that have created issues
cluding one-time items, (AP Photo/Elise Amendola) for corporations.
it earned $1 per share.
Analysts on average ex- up sales for the division by cent decline. bottled teas. PepsiCo has PepsiCo said it will no lon-
pected $1.07 per share,
according to analysts sur- 2 percent. The maker of Within sodas, Johnston said said it stands to benefit ger include the results of its
veyed by Zacks Investment
Research.q Frito-Lay chips has been full-calorie drinks declined from the trend, given the local Venezuelan subsidiar-
increasing options on sizes, 1 percent while diet sodas popularity of drinks like its ies and joint venture in its fi-
offering Lay’s potato chips fell 6.5 percent. Gatorade. nancial statements and will
in a bag that is two ounces Both Coca-Cola and Pep- “I think focusing on just include only revenue relat-
smaller than the traditional siCo are facing an ongoing (carbonated soft drinks) is ing to those operations to
10-ounce bag. decline in soda consump- a thing of the past,” Nooyi record cash received for
Tom Greco, the head of Fri- tion in the U.S., and more said. those sales.
to-Lay North America said recently, a move away For the quarter ended PepsiCo Inc. now antici-
last month that the com- from traditional diet so- Sept. 5, PepsiCo’s profit pates a 9 percent increase
pany is shaking up bag siz- das. PepsiCo has blamed nevertheless plunged af- in 2015 core earnings per
es because of shrinking U.S. the latter trend on worries ter it wrote down invest- share growth, on a con-
households, but also to im- about aspartame, and this ments in Venezuela, tak- stant currency basis. Its
prove margins for retailers. summer replaced the in- ing a charge of $1.4 bil- prior outlook was for an 8
The company’s drinks unit gredient in Diet Pepsi with lion, or 92 cents per share, percent rise.
for North America, which sucralose, a different artifi- and continued to struggle The company’s stock
includes Gatorade and cial sweetener. with unfavorable currency rose 2 percent to $97.75
Aquafina water, also had The company said it is exchange rates. But re- Tuesday.q
Freeport-McMoRan considers exiting oil and gas
NEW YORK (AP) — Freeport- weaker demand. Many month, activist investor gas business.
McMoRan said Tuesday have cut spending as a Carl Icahn disclosed that The company also shook
that it is considering spin- result. Earlier this year, Free- he bought an 8.5 percent up its board of directors,
ning off its oil and gas busi- port-McMoRan slashed its stake in the company and cutting its size to nine mem-
ness and other strategic quarterly dividend 84 per- planned to discuss possible bers from 16.
alternative to focus on its cent because of falling cuts in the company’s op- Shares of Freeport-McMo-
copper mining business. oil prices. And in August, erations. Ran Inc. rose 43 cents, or
The Phoenix company pro- Freeport-McMoRan an- Besides a spinoff, Freeport- 3.9 percent, to $11.61 in
duces oil and natural gas nounced a cost-cutting McMoRan said it is also morning trading Tuesday.
around the country. Ener- plan due to falling copper considering joint venture Its shares are down about
gy companies have been prices and soft econom- arrangements or cutting 50 percent since the begin-
hurt by falling oil prices and ic conditions. That same spending in the oil and ning of the year.q
