Rival PepsiCo (PEP) matched quarterly profit expectations last week and also said it would raise prices again as costs and weaker consumer spending pressured results.
Coca-Cola (KO) also raised consumer prices in the recent quarter as costs for packaging, sweeteners and other ingredients continued to rise.
As of earlier this year, Pepsi had been able to better manage the risk of rising commodity costs than Coca-Cola, Pepsi had turned to improved operational efficiencies and price increases to help offset those costs, but CFO Hugh Johnston conceded in April that pricing in the first half of the year "has not been what we would have liked or expected."
Costs for plastic bottles and fuel to transport beverages has risen as oil prices heated up this year. Oil prices affect the price of polyethylene terephthalate, or PET, the plastic used by beverage companies to make soda bottles. Coke, Pepsi, Dr Pepper Snapple and other beverage makers cannot hedge the prices they pay for PET because the material is not traded like other commodities.Earnings Calendar. --Written by Miriam Marcus Reimer in New York.
>To contact the writer of this article, click here: Miriam Reimer. >To follow the writer on Twitter, go to http://twitter.com/miriamsmarket. >To submit a news tip, send an email to: firstname.lastname@example.org.
>>See our new stock quote page.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV