Financial Report Financial reports from the largest companies of the world

PepsiCo decreased the operating profits for the year

PepsiCo cut their forecast for profit in this and subsequent years, indicating the reason for the higher raw material costs, difficult economic conditions and investment in emerging markets. The worsened outlook for the company came a day after its rival Coca-Cola surprised the market with increased sales volumes in all segments of its business. The manufacturer of Pepsi-Cola now expects profit for 2011 to grow by between 7 and 8% in previous estimates of double-digit growth. The fourth-quarter net profit of PepsiCo fell by 5% to 1.37 billion dollars, or 85 cents a share, compared to 1.43 billion dollars, or 90 cents a share, a year earlier. The Chief Financial Officer of PepsiCo Hugh Johnston stated that the company expects raw material costs to increase by between 1.4 billion and 1.6 billion dollars (8 to 9.5%) this year, but the company will be careful not to increased by as much consumer prices in order not to alienate them. The group sales for the quarter jumped 37% to 18.16 billion dollars in the expectation of revenue of 17.6 billion dollars. This report reveals the instable financial situation in the world business, which decreases the profits of many companies in the world. The economic conditions are quite difficult and the business is constricted by financial crisis, high unemployment rate and bankruptcies of financial structures.