PepsiCo profit trails estimates; firm plans to cut 3,300 jobs

PepsiCo Inc, the world's largest snack maker, said it will cut 3,300 jobs after posting profit that fell more than analysts estimated and lowering its forecast for the rest of the year.

Full-year earnings excluding some costs will be $3.67 to $3.68 a share, lower than its prediction of $3.72 in July, the Purchase, New York-based company said.

Net income decreased to $1.58 billion, or 99 cents a share, from $1.74 billion, or $1.06, a year earlier, PepsiCo said today in a statement. Excluding some costs including hedging, profit was $1.06 a share, trailing analysts’ estimates by 2 cents.

Sales jumped to $11.2 billion from $10.2 billion. Declining beverage sales in North America, which makes up a fourth of PepsiCo’s annual revenue, hurt profit as consumers cut back on soft drinks to better afford higher priced gasoline and food.

PepsiCo, the world’s second-largest soda maker, fell $1.77, or 2.9 per cent, to $60 at 7:43 am in trading before the New York Stock Exchange opened. The shares fell 19 percent this year before today, compared with a 23 percent decline for Coca-Cola Co.

The job cuts are part of PepsiCo’s plan to pare $1.2 billion in pretax expenses during the next three years. As many as six plants will be closed, the company said. The moves will cost the company $550 million to $600 million before taxes in the fourth quarter.

Thirteen analysts surveyed by Bloomberg estimated full- year profit of $3.74 a share for the year.

Twelve analysts estimated third-quarter profit of $1.08 a share.