Crisis Hits Real Economy: Pepsi Flat
PepsiCo. which, like Coca-Cola, has long been considered a "safety stock" -- in good times or bad, folks drink soda -- said this morning that people actually aren't drinking soda. Result: The company will cut 3,300 jobs in the United States.
The company's stock is being hammered thanks to a trifecta of bad news from the soda giant this morning: Third-quarter profits fell short of Wall Street expectations, the company cut its full-year outlook and it refused to give guidance for 2009.
Nearing lunchtime, shares of PepsiCo. are trading down about 10 percent. It is the nation's No. 2 soda company behind Coke.
The company said the job cuts are part of a plan to save $1.2 billion over the next three years.
Soda only makes up about 25 percent of PepsiCo.'s sales. The company owns a wide array of snack foods, including Lay's, Frito-Lay's, Doritos, Cheetos and Ruffles.
Third-quarter sales in the Frito-Lay division were up 9 percent, but soda sales were down 3 percent and non-soda sales -- such as Gatorade -- were down 5 percent, the company reported.
-- Frank Ahrens
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Posted by: benq11 | October 14, 2008 12:38 PM
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