Pepsico Reports Earnings Decline

PepsiCo Inc.’s earnings fell 10 percent in the fourth quarter as operating profits tumbled in its worldwide soft drink business while its snack food operations managed a small increase.

The company had signaled what its results would be last week so the figures released after the stock market closed Monday were in line with Wall Street expectations.

The Purchase, N.Y.-based PepsiCo earned $361 million, or 24 cents a share, in the three months ended Dec. 26 compared with $401 million, or 25 cents a share, a year earlier.

Revenue for the quarter rose 15 percent to $7.19 billion from $6.26 billion a year earlier.

Worldwide soft drink operating profits sank 33 percent due to a difficult pricing environment around the world as well as higher advertising and marketing expenses.

Profits in North America fell 27 percent.

In other reports:

Gannett Co.’s earnings rose 12 percent in the fourth quarter of 1998, boosted by strong advertising demand at USA Today and its other newspapers.

Revenue rose 5.5 percent to $1.39 billion from $1.32 billion.

Gannett is the nation’s second-largest newspaper publisher in terms of daily papers, trailing only Community Newspaper Holdings Inc., which has expanded rapidly in recent years.

New hotels and a busy holiday season added up to $7.5 million in profit for Cavanaughs Hospitality Corp. in 1998.

The Spokane-based hotel and hospitality chain reported net income of $7.5 million on sales of $86.3 million for the year. That’s up from income of $1.8 million on sales of $53.5 million for 1997.

The returns came after fourth quarter earnings of $1.3 million on sales of $23 million, up from a loss of $139,000 on sales of $10.6 million the same quarter a year ago.

“This was an important year in the long history of our company,” said Donald Barbieri, president and CEO of Cavanaughs. In 1998 the company went public and was traded on the New York Stock Exchange. The capital raised allowed the company to increase its roster of hotels to 19 and expand to Utah and Montana.

The company now plans to complete $8 million in renovations to its latest acquisitions.

“When entering a room, we want the customers to feel like they are in a Cavanaughs Hotel, whether they are in Seattle or Pocatello,” Barbieri said.

Cavanaughs also runs a hospitality entertainment business, sells tickets and books performers for a variety of venues, and owns and manages residential and retail spaces.

Cavanaughs stock closed Monday at $10.12, up 43 cents.