PepsiCo profits take 38pc tumble

PUBLISHED : Wednesday, 05 February, 1997, 12:00am
UPDATED : Wednesday, 05 February, 1997, 12:00am

PepsiCo, the world's second largest soft drinks seller, says fourth-quarter earnings before charges fell 38 per cent, far more than expected.

The company said profit from operations fell to US$351 million, or 24 cents a share, from $565 million, or 35 cents, a year earlier.

The results fell far short of the 33 cents a share analysts had been expecting.

Revenue rose 3.6 per cent to $9.53 billion from $9.21 billion.

Charges of $151 million to restructure international beverage operations and $172 million to write down restaurant assets resulted in net income of $28 million.

A charge of $384 million for an accounting change made net income a year earlier $181 million.

The company's ailing restaurant division, which includes the Taco Bell, KFC and Pizza Hut chains, reported an operating loss of $144 million in the quarter, compared with operating profit of $261 million a year earlier.

Sprint Corp said fourth-quarter profit rose 4.6 per cent as the company boosted calling traffic on its network by 21 per cent and installed more local telephone lines.

The third largest long-distance phone company in the United States said profit from operations rose to $281.8 million from $269.3 million year earlier.

Sales rose 8.5 per cent to $3.62 billion from $3.34 billion.

Volume, or the minutes of use on Sprint's network, rose 21 per cent.

A charge of $36 million resulted in net income of $245.3 million. Sprint posted charges a year earlier that resulted in a loss of $343.9 million, or 98 cents.