Pepsi to Cutback Jobs and Pensions To Boost Earnings
PepsiCo Inc. (NYSE:PEP) is considering cutting nearly 4,000 jobs and reducing pension contributions. The belt tightening is being considered as a way to boost earnings, as the soft-drink company could save $75 million from eliminating its 401k match.
Don’t Miss: Did Retailers Hit or Miss The Holiday Season?
In a statement to CNBC, a Pepsi spokesman explained,“Like all companies are doing in today’s environment and as we’ve said since the bottler integration and during our ongoing business review, we are evaluating efficiencies in all areas of our operations — including employment levels and benefits. As it relates to benefits, as part of our annual review, we work to optimize benefits for employees and the company, and provide competitive benefit levels. Information contained in certain media reports is inaccurate and any changes affecting our employees will be communicated to them first.”
- Shares of Pepsi fell nearly 1 percent after the news, and are flat over the past year. However, other beverage companies are showing strength. SodaStream (NASDAQ:SODA) shares popped more than 4 percent on Thursday after CEO Daniel Birnbaum says American consumers are ready for “fizzling” ice tea and lemonade. The new partnership formed with Kraft (NYSE:KFT) will allow consumers to produce carbonated versions of Country Time lemonade and Crystal Light iced tea. Shares of SodaStream have surged almost 20 percent this week.
- In the past three years, shares of Starbucks Corp. (NASDAQ:SBUX) have jumped 373 percent. The coffee giant hopes to keep those returns flowing by increasing prices 1% in the U.S. Northeast and Sunbelt regions. “These adjustments are the result of balancing the cost of doing business with competitive dynamics in these markets,” Starbucks spokesman Jim Olson told Reuters. Starbucks previously said it expects rising commodity costs to lower fiscal 2012 earnings by about 21 cents per share.
- Coca-Cola (NYSE:KO) is one of the most world’s largest companies. Shares have increased 55 percent over the past three years. The company is also popular with hedge funds and Warren Buffett. According to the most recent data, hedge funds held more than $16 billion in Coca-Cola shares. Meanwhile, Buffett’s Berkshire Hathaway (NYSE:BRKA) has more than $13 billion invested in shares.
Investing Insights: BlackBerry: Staring at the Face of Extinction.
To contact the reporter on this story: Eric McWhinnie at email@example.com
To contact the editor responsible for this story: Damien Hoffman at firstname.lastname@example.org