( PAS) posted a rise in fourth-quarter earnings and guided for an in-line performance in 2006.
The Minneapolis-based bottler made $38 million, or 28 cents a share, for the quarter ended Dec. 31, up from the year-ago $35 million, or 25 cents a share. Revenue rose to $894 million from $814 million a year earlier. Analysts surveyed by Thomson First Call were looking for a 28-cent profit on sales of $888 million.
Volume grew 6.9% in the quarter driven by the CIC contribution, as volume declined 0.9% on a constant territory basis. The carbonated soft drink category trends continue to be a challenge. At PepsiAmericas, carbonated soft drinks were down 3% in the quarter on a constant territory basis. Aquafina volume increased over 30% in the quarter while the balance of the noncarbonated beverage portfolio volume increased 7%, led by volume growth in Lipton Iced Tea, Frappuccino, and Tropicana juice drinks. Take-home package volume decreased 2%, reflecting lower carbonated soft drink can sales, while single-serve package volume increased 4%. This represents the company's best single-serve volume performance this year.
Net sales in the U.S. grew 11.7% to $758.7 million in the fourth quarter, driven by solid net pricing and the CIC contribution. Net pricing improved 4.2% over the prior year quarter. Mix contributed 40% of the net pricing improvement and the remainder came from rate. Domestic cost of goods sold increased 12.5% to $432.8 million, with CIC representing 8 percentage points of the increase. The higher cost of goods sold per unit reflected higher packaging and energy costs. Gross profit grew by 10.5% to $325.9 million, with CIC contributing 8 percentage points of the increase.
The company guided to an adjusted profit, excluding certain items, of $1.45 to $1.50 a share for 2006, up from $1.37 in 2005 and in line with the $1.48-a-share Thomson First Call estimate. The company said it expects to generate adjusted operating cash flow of $235 to $260 million in 2006, with capital spending in the range of $170 to $180 million.
"The combination of revenue growth and cost management in our U.S. business drove our strong finish in 2005. Accelerated growth in our noncarbonated portfolio, which was up 16% in the quarter, positions us well as we begin 2006," said CEO Robert C. Pohlad. "In 2006, revenue growth is our top priority. We will strategically invest in our organization to accelerate volume in the U.S., while maintaining the right contribution from pricing. And we continue to expect Central Europe and the Caribbean to be important sources of our growth."