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PepsiCo To Cut 8,700 Jobs While Investing Up To $600 Million In Brands

Pepsi

First Posted: 02/ 9/2012 7:09 am Updated: 02/ 9/2012 8:36 am


* Q4 adj EPS $1.15 tops Wall St view of $1.13/shr

* Targets incremental savings of $1.5 bln over 3 yrs

* Global Beverage Group chief Massimo D'Amore to retire

* Plans to cut 8,700 jobs

By Martinne Geller

Feb 9 (Reuters) - PepsiCo Inc expects to cut 8,700 jobs as part of a plan to save an extra $1.5 billion over the next three years, as it pours more money into its brands.

Its shares fell 1.1 percent to $66 in premarket trading from Wednesday's close of $66.74 on the New York Stock exchange.

PepsiCo, maker of Sierra Mist soda, Tropicana juice and Gatorade sports drink, also reported better-than-expected fourth-quarter profit and forecast a 5 percent decline in 2012 earnings as it increases advertising and marketing by $500 million to $600 million.

The investment will be focused on 12 brands, including Pepsi-Cola, Lay's, Gatorade, Tropicana, Doritos and 7-UP. It is trying to improve performance in North America, where it lags behind archrival Coca-Cola Co.

For 2013, PepsiCo expects earnings to grow at a high-single-digit rate.

The job cuts will occur in 30 countries, PepsiCo said.

The $1.5 billion in extra savings is in addition to $1.5 billion it already planned to save over that period.

PepsiCo also said that Massimo D'Amore, president of its Global Beverages Group, would retire at the end of February.

The company reported a fourth-quarter profit of $1.42 billion, or 89 cents per share, up from $1.37 billion, or 85 cents per share, a year earlier.

Excluding items, PepsiCo earned $1.15 per share, topping analysts' average estimate of $1.13 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 11 percent to $20.2 billion.

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Filed by Reuters  |