Fizzling Volume Hits Pepsi Bottling Profits

Pepsi Bottling Group Inc. (PBG), the largest bottler of Pepsi drinks, said on Tuesday quarterly profit fell as sales by volume fell in its key U.S. market.

But Pepsi Bottling's (search) profit beat Wall Street expectations as price hikes the company made at the end of 2004 held throughout the first quarter.

Net profit fell to $39 million, or 15 cents a share, in the first quarter ended March 19, from $50 million, or 19 cents a share, a year earlier.

Analysts, on average, were expecting net earnings of 13 cents a share, according to Reuters Estimates. Operating earnings per share were expected to be 12 cents.

Revenue rose to $2.15 billion from $2.07 billion. Net revenue per case rose 3 percent.

The industry has been struggling to lure back health-conscious consumers who have cut back their consumption of full-calorie carbonated soft drinks.

Pepsi Bottling's worldwide volume was flat compared to last year's first quarter, but fell 1 percent in the United States.

The company raised the low end of its 2005 profit forecast. It now expects earnings per share of $1.78 to $1.84, compared to it previous forecast of $1.76 to $1.84.

The outlook excludes the impact of the 53rd week of company's fiscal year, which is expected to add 2 cents to 3 cents per share.

The forecast also excludes the effect of expensing employee stock options, which Pepsi Bottling said it is required to do by the fourth quarter.