Sugar and salt proved a profitable combination as
reported a 21% leap in profits during the fourth quarter.
The snack and beverage giant posted net income of $805 million, or 46 cents a share, in the fourth quarter, a 21% increase over the year-ago period and in line with estimates.
The company cited improved margins and solid volume growth. Spurred by new products such as Go Snacks and Gatorade, total worldwide volume grew 4%, with snacks higher by 5% and beverages by 3%.
PepsiCo said the integration of Quaker Oats is proceeding ahead of schedule and that the company achieved about $250 million in cost cuts and revenue boosts in 2002 from the merger. It expects those numbers to reach $400 million by the end of 2004.
The company also announced a restructuring of its operating divisions, merging its international snack and drink business. "Putting these businesses together into a single organization allows PepsiCo to leverage its combined strength more effectively and efficiently," the company said in a statement.
Despite its positive outlook, Pepsi will join a growing list of companies, including archrival
, in no longer providing earnings guidance. Steve Reinemund, Pepsi's CEO, said the decision should not be construed as a lack of confidence in its future business, saying "issuing specific earnings targets were taking up too much time." He did toss analysts one last bone, saying, "We are very comfortable with the current estimates" for earnings of $2.19 per share in 2003.
Shares of Pepsi were off $1.53, or 3.75%, at $39.54.