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To: Jorj X Mckie who wrote (9487)	7/19/2002 11:28:16 AM
From: MulhollandDrive	Read Replies (1) \| Respond to of 17639

now look what you've done... 07/19 10:41 PepsiCo Shares Fall as 2nd-Qtr Sales Rise Less Than Forecast By Maxine Clayton Purchase, New York, July 19 (Bloomberg) -- PepsiCo Inc. shares fell as much as 13 percent, the biggest decline in almost two decades, after the world's second-largest soft-drink company said second-quarter sales rose less than anticipated. The shares dropped $4 to $36.30 in midmorning trading, after falling as low as $35.25. Shares of bigger rival Coca-Cola Co. declined $1.51, or 3.2 percent, to $46.42. Declining Tropicana juice sales and falling currencies in Argentina and Brazil limited adjusted revenue growth to 2.3 percent, PepsiCo said in a statement. The company also spent more on incentives to retailers to gain shelf space in chains, including supermarkets amid competition from regional snack-food makers, which hurt revenue. PepsiCo may reduce its 2002 sales forecast for a 6 percent to 7 percent increase, investors said. ``Pepsi will have to guide down'' the revenue estimate, said Pete Schofield, a money manager at John Hancock's Sovereign Investors, whose $2.7 billion in assets includes about 550,000 PepsiCo shares. ``It will be disturbing if come to find out that the growth engine Frito is sputtering a bit.'' Frito-Lay generates about 60 percent of profits. The company has said that increasing revenue as much as 7 percent this year may be difficult because of weak economies in Latin America and stiff competition. Tropicana sales fell 3 percent in the quarter. PepsiCo never gave a specific sales forecast for the second quarter. The company said that including revenue from a European unit that wasn't consolidated in the year-earlier period gives a better comparison of results. That's the basis of the 2.3 percent adjusted sales figure. Profit Rises Total sales in the second quarter increased 5.3 percent to $6.18 billion from $5.87 billion. Net income rose to $888 million, or 49 cents a share, from $798 million, or 44 cents, a year earlier. PepsiCo added new snacks such as Go Snacks to the Frito-Lay unit. The company also moved quicker than Coca-Cola to gain a bigger share of the fast-growing market for juices and water, investors have said. The stock had declined 11 percent since July 9 when Pepsi Bottling Group Inc., the largest bottler of PepsiCo's beverages, said volumes sales in the U.S. rose less than forecast. The company said it still expects per-share earnings this year to rise 13 percent to 14 percent. PepsiCo's board authorized the repurchase of as much as $5 billion of common stock over the next three years. The soft- drink maker expects to begin buying shares next week.