Reaffirming its confidence in its business outlook, PepsiCo has updated its full year guidance. The move has been taken to reflect the impact of the recently concluded Internal Revenue Service audit settlement and fourth quarter restructuring efforts.
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Earlier this week, PepsiCo said that it expects to record a non-cash tax benefit of approximately US$600m, or $0.36 per share, in the fourth quarter as a result of an IRS tax settlement.
On Friday (20 October) the company announced that it is consolidating manufacturing at Frito-Lay North America, reducing the number of sites from 34 sites to 32 to increase manufacturing productivity and supply chain efficiencies. PepsiCo expects this action to result in a predominantly non-cash, pretax charge of approximately $66m, or $0.03 cents per share in the fourth quarter.
PepsiCo said that it now expects 2006 reported EPS of at least $3.31 per share. The company reaffirmed its previous full-year guidance of core earnings per share of at least $2.98. PepsiCo also confirmed its previous cash flow guidance of approximately $6.2bn from operating activities, $2.2bn in capital spending and $3bn in share repurchases.
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