Pepsi to Restructure Some Operations

The company also affirms its 2005 core earnings forecast.
Author:
Publish date:

PepsiCo

(PEP) - Get Report

said it is planning a restructuring that will cut costs in some of its operations, and the soda and snacks maker affirmed its core earnings forecast for 2005.

The company said it will reinvest what will amount to 3 cents a share of its profits in the restructuring and record a pretax charge of $65 million to $85 million.

Pepsi didn't provide details, but the company said "specific actions are being implemented throughout the fourth quarter as plans are finalized." Separate announcements discussing parts of the reorganization will be released starting Wednesday.

As a result, the company now expects earnings, using generally accepted accounting principles, of $2.38 to $2.39 for the year. Core earnings per share should be $2.64 to $2.65.

On average, analysts surveyed by Thomson First Call expect a core profit of $2.65 for 2005.

"We continue to see very good top-line momentum, giving us confidence in our outlook for the fourth quarter," the company said in a press release Wednesday. "At the same time, we are tightening our belts wherever we can to be in position to deal more effectively with continued cost pressures next year."

Pepsi said it's confident that it will see low double-digit earnings per share growth in 2006.