Pepsi to Bring Foreign Cash Home

The company sees a big tax expense related to a repatriation plan.
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Pepsi

(PEP) - Get Report

said it would repatriate $7.5 billion of overseas profits, leading to a big tax expense in the third quarter.

The company also reaffirmed full-year earnings guidance, said it would buy back $2.5 billion to $3 billion worth of stock this year and named a pair of directors to replace one departing board member.

The Purchase, N.Y., cola company said the third-quarter tax expense associated with the repatriation under the American Jobs Creation Act would be $475 million. Including that cost, Pepsi expects to make $2.32-$2.35 a share for 2005, though the company reaffirmed its pro forma 2005 profit projection at $2.56 to $2.59 a share, in line with the $2.60 Wall Street estimate. Pepsi noted that the full-year pro forma projection is based on a 52-week year, while the lower number includes both the tax charge and this fiscal year's unusual 53rd week.

The company also named Duke University Health System chief Victor Dzau and former J.P. Morgan finance chief Dina Dublon to its board, replacing the departing Solomon Trujillo, who is leaving to head up Australia's

Telstra

.

Pepsi also declared a 26-cent quarterly dividend, in line with last quarter's increased payout, payable Sept. 30 to shareholders of record Sept. 9.

On Friday, Pepsi rose 15 cents to $54.83.