New Forecast: 2Q EPS of 70 cents to 74 cents
Old Forecast: 2Q EPS of 65 cents to 69 cents
Pepsi Bottling Group (PBG) has raised both its second quarter and its 2009 earnings guidance. PBG credits improved sales in the U.S., continued commodity price deflation and decreased volatility in foreign currencies for the improved outlook.
However, commodity prices may rise more than PBG seems to expect. “We’ve already seen it over the past few weeks with oil prices going back up,” says David Silver, another analyst at Wall Street Strategies. Increasing fuel prices will impact the company’s costs, as will the rising price of aluminum and high fructose corn syrup. Meanwhile, PepsiCo (PEP) is proposing to acquire the company or key parts of it.