Pepsi lowers its targets

City A.M. Reporter
PEPSI cut its earnings growth targets for 2011 and beyond yesterday, citing higher commodity costs, a difficult economy and investments in emerging markets.

Chief executive Indra Nooyi, who was peppered with tough questions by analysts during a tense conference call, said the lowered longer-term outlook was prudent given the uncertain economic conditions.

“We have no idea what the commodity markets are going to look like in 2012 and beyond,” Nooyi said on the call.

The results come a day after rival Coca-Cola surprised the market with sales volume increases in all of its segments.

Pepsi said it now expects 2011 earnings to rise seven per cent to eight per cent, with high single-digit growth beyond that. It had earlier forecast low double-digit percentage rate growth for 2011 and 2012.

In the fourth quarter, Pepsi’s net income fell five per cent to $1.37bn (£850m), or 85 cents per share. Its sales jumped 37 per cent to $18.16bn, helped by buying two bottlers.