Pepsi Bottling Group third-quarter profit rises

SOMERS, N.Y., Oct 1 (Reuters) – Pepsi Bottling Group Inc. (NYSE:PBG – News), the largest manufacturer of Pepsi-Cola drinks, on Tuesday said its third-quarter profit rose, as strong results in Russia helped offset some lower-than-expected volume in the United States and Spain.

Pepsi Bottling said it earned $178 million, or 61 cents per share, in the quarter ended Sept. 7, compared with a profit of $150 million, or 51 cents per share, a year earlier.

Analysts had expected the company to earn 60 cents to 63 cents per share for the quarter, with a mean target of 61 cents, according to Thomson First Call. Pepsi Bottling has either met or exceeded the Thomson First Call mean estimate since it went public in 1999.

Pepsi Bottling said worldwide case volume grew 1 percent in the quarter, assuming all significant acquisitions made in 2001 were made at the beginning of the 2001 fiscal year and excluding significant acquisitions made in 2002. Volume growth in the key U.S. market was also up 1 percent.

The Somers, New York, company said net revenue rose to $2.46 billion from $2.27 billion a year earlier.

Chief Executive John Cahill said Pepsi Bottling is looking forward to completing its purchase of Pepsi-Gemex SA (Mexico:PEPSIGXCPO.MX – News; NYSE:GEM – News), the main bottler of Pepsi products in Mexico, but did not provide timing of the deal or other details in a statement. Pepsi Bottling already operates in Canada, Greece, Russia, Spain, Turkey and the United States.

In early September, Pepsi Bottling said it expected to earn 60 cents to 62 cents per share for the quarter. At that time, it forecast full-year earnings of $1.41 to $1.45 per share, but it narrowed that view to $1.42 to $1.45 per share on Tuesday.

The company still expects volume to be up just 2 percent in 2002, down from an earlier view of 3 percent growth.

Pepsi Bottling said it still expects earnings before interest, taxes, depreciation and amortization to increase 10 percent to 12 percent for the year, and said it expects operating free cash flow in 2002 of $375 million, up $80 million from 2001.

Through Monday, shares of Pepsi Bottling had fallen less than 1 percent since the beginning of the year, underperforming shares of Coca-Cola Enterprises Inc. (NYSE:CCE – News), the largest bottler of Coca-Cola Co. (NYSE:KO – News) drinks, whose shares climbed about 12 percent during the same period.