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Pepsi Bottling tops estimates and ups 2000 view

US-based Pepsi Bottling Group Inc. reported third-quarter earnings that beat Wall Street estimates, as the largest bottler of PepsiCo Inc. beverages saw its profits boosted by strong revenue per case …

US-based Pepsi Bottling Group Inc. reported third-quarter earnings that beat Wall Street estimates, as the largest bottler of PepsiCo Inc. beverages saw its profits boosted by strong revenue per case growth in the US. The company also said it was increasing its full year 2000 earnings estimate by 2 cents per share to a range of US$ 1.50 to US$ 1.52, compared with 71 cents a year ago. The consensus estimate for 2000 was US$ 1.49 a share, as compiled by research firm First Call/Thomson Financial. Pepsi Bottling, in which PepsiCo holds a 40% stake, also said it was “on target” to meet its previously announced goal of 17% growth in earnings before interest, taxes, depreciation and amortization for the year. The company posted a 13% third-quarter gain in EBITDA to US$ 365 million. The company posted net income of US$ 123 million, or 82 cents per share, for the quarter ended on September 2 compared with US$ 92 million, or 59 cents per share, a year earlier. Analysts on average had expected the company to post earnings of 80 cents per share according to First Call/Thomson Financial. Somers, New York-based Pepsi Bottling reiterated that its third-quarter volume grew nearly 2% worldwide and was positive in the US market, which showed considerable strength during the last four weeks of the quarter. The company also restated that its volume expectations for the fourth quarter were still in the 3-4% range. Results were also boosted by lower cost of sales per case, resulting from currency factors, the favourable impact of a depreciation accounting change and a positive country mix. It also claimed benefits from timely purchasing of raw materials. Reported net revenues rose 4% to US$ 2.125 billion, but worldwide revenue results were cut by more than 1% due to currency translations, including weakness in the Canadian dollar and the Euro, Pepsi Bottling said. Pepsi Bottling“s outlook was affirmed by analysts, who said the sector is ripe for growth now that it has recovered from last year“s price increases. The company, which went public in a March 1999 initial public offering of 100 million shares made by PepsiCo, said it repurchased more than 1 million of its common shares during the quarter and has bought back almost 10 million shares since the buyback programme started last October. Third quarter average diluted shares were down 4% at 149 million.

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