Profits drop for Pepsi bottler

Pepsi Bottling Group, Pepsi’s largest bottler, said Tuesday that its fourth-quarter profits and sales volume declined amid a broadening economic slowdown.

The Somers, N.Y.-based bottler also projected a drop in earnings for 2009. Foreign exchange rates for a stronger dollar likely would bring down profits made overseas, the company said.

The results are the first of a series of financial reports this week in the beverage industry. Atlanta-based Coca-Cola Enterprises, Coke’s largest bottler, is scheduled to release financial results Wednesday. Coca-Cola Co. and PepsiCo will follow later in the week.

In the last three months of 2008, Pepsi Bottling posted a loss of $271 million, or $1.28 per share, as it took one-time charges for restructuring and the write-down of assets. Setting these charges aside, the company would have made about $65 million, or 30 cents a share, in the fourth quarter.

The result was better than analyst expectations of 25 cents a share, according to a Thomson Financial survey. But it was worse than comparable earnings of 39 cents a share in the fourth quarter of 2007.

Revenues for the fourth quarter fell 5.6 percent, to $3.8 billion.

For the full year, Pepsi Bottling’s net income fell 70 percent to $162 million. The company took $338 million in one-time charges primarily for restructuring and the write-down of assets.

Revenues rose 1.5 percent to $13.8 billion, but the increase was driven by higher prices. Sales volume declined. In the fourth quarter, Pepsi Bottling’s case volume fell 7 percent in the United States, Canada and Mexico and 6 percent in Europe.

For 2009, Pepsi Bottling projected full-year earnings, excluding one-time costs, between $2.15 and $2.25 per share, down from $2.27 per share in 2008.