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PepsiCo to Slash 8,700 Jobs; Reports Q4 Results (PEP)

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PepsiCoPepsiCo Inc. (NYSE: PEP), the Purchase, New Jersey-based global food, snack and beverage company, today announced that it plans to cut 8,700 jobs, or nearly 3% of its workforce as it looks to offset higher costs for ingredients and higher spending on advertising and marketing in North America. The company also announced its fourth-quarter financial results, posting an increase in net income.

PepsiCo expects the job cuts to result in savings of $1.5 billion by 2014. Pepsi has been facing higher costs for raw materials. Raising prices to offset higher costs is an option. However, the move may backfire considering the uncertain economic environment. As a result, Pepsi, like many other companies, is looking to cut costs.


Pepsi’s rival, Coca-Cola Company (NYSE: KO) also announced a cost-cutting program earlier this week. However, Coke did not say that it was cutting any jobs.

Pepsi CEO Indra Nooyi said that although it is cutting 3% of its 800,000 worldwide workforce, the reduction is spread out over 30 countries.

For the fourth quarter of 2011, the company reported net income of $1.42 billion, representing an increase of 4% over the same period in the previous year. Excluding one-time items, the company’s net income for the quarter was $1.15 per share, slightly above analysts’ estimate of $1.13 per share.

PepsiCo’s revenue for the quarter jumped 11% on a year-over-year basis to $20.16 billion. Analysts were expecting the company’s revenue for the quarter to come in at $19.89 billion. Volume rose 7% in the fourth quarter.

For the full year 2011, PepsiCo’s net income was $6.46 billion, or $40.03 per share, up 2% over 2010. The company’s revenue rose 15% to $66.5 billion in 2011.

PepsiCo shares are down sharply in trading today. At last check, the stock was trading 4.12% lower at $63.99 on above average volume of 9.52 million.

 

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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