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PEPSI EARNINGS BUBBLE UP; NEW PLAYER IN COLA WARS
Published October 12, 1994
PepsiCo Inc, "which sent shivers through the investment community in June when it disclosed that its second-quarter earnings would be flat, attracted enthusiastic applause on Wall Street yesterday after it reported third-quarter results that were better than expected." The company said net income rose 18%, to $541.5M. Revenue for the quarter was up 12%, to $7.06B from $6.32B. "The one blot on the Pepsi report was performance at its Pizza Hut chain." Pizza Hut's operating profit dropped 25% during the quarter, to $78.5M (Kenneth Gilpin, N.Y. TIMES, 10/12)....Virgin Cola, Richard Branson's latest enterprise, "was greeted skeptically yesterday by other soft-drink makers. They look forward to the competition but wonder how Virgin and Cott, its Canadian partner, will crack distribution and sales problems." In London, Diane Summers asks, "What has a cola drink to do with an airline, radio station, music store or computer game, and what have any of these activities to do with each other?" Virgin's corporate affairs dir Will Whitehorn noted that the Virgin name "does not mean a specific product to the public, but is associated with fun, friendliness, doing things differently, quality and price competitiveness." These attributes, he noted, "mean the brand can be applied to a diverse range of products" (FINANCIAL TIMES, 10/12). Virgin Cola should hit stores in Britain within a few months, then expand into the U.S., the rest of Europe and Japan (ATLANTA CONSTITUTION, 10/12). UN-COLA: In this morning's WALL STREET JOURNAL, William Power suggests that Snapple Beverage, which closed at 12 1/18 yesterday, could be a good stock purchase again (WALL STREET JOURNAL, 10/12).