Higher sales volume, cheaper sugar boost Pepsi-Cola's earnings in 2012

MANILA – Pepsi-Cola Products Philippines Inc on Friday said its net income nearly tripled last year on the back of high volume growth, lower sugar prices and stringent cost management.

In a statement, the beverage maker said its net income surged 192 percent to P844 million in 2012 from P289.05 million the year before after doubling its earnings to P147 million in the fourth quarter.

“On the back of this remarkable performance, we expect to improve further in 2013 with prudent cost management, increased marketing efforts and a generally positive economic environment. We will continue to innovate with brands that will satisfy the thirst-quenching needs of the Filipino consumers,” said Pepsi-Cola Philippines president Partho Chakrabarti.

Gross sales jumped 14 percent to P22.73 billion from P19.96 billion in 2011, supported by a 15 percent increase in sales volume across brands and categories.

“This is a significant feat given the aggressive competition, marketplace challenges and heavy monsoon rains. We focused on driving growth of both the carbonated and non-carbonated drinks segments, in line with the strategy on ensuring affordability and availability across the Philippines,” said Jika Dalupan, Pepsi-Cola Philippines vice president for corporate affairs and communications.

Cost of sales inched up 6 percent driven mainly by higher sales volume.

A licensed bottler of PepsiCo Inc and Pepsi Lipton International Ltd, the local unit manufactures beverages under brands such as Pepsi-Cola, 7Up, Mountain Dew, Mirinda, Mug, Gatorade, Lipton Iced Tea, Tropicana/Twister, Propel and Sting.

Pepsi-Cola recently made its foray into the powdered juice segment with Mirinda Powder Fun Mix.

source: interaksyon.com

Online sales jump on Cyber Monday, eBay shines

SAN FRANCISCO — Online sales jumped on Cyber Monday, sending e-commerce retailers’ shares higher and suggesting strong growth from earlier in the holiday shopping season is continuing for now.

Sales on eBay Inc’s online marketplace were particularly strong and Amazon.com Inc continued its rapid holiday shopping season growth, according to early Cyber Monday data released by e-commerce firm ChannelAdvisor.





EBay’s shares climbed 4.9 percent to close at $51.40. The stock hit an intra-day high of $51.78, the highest level since early 2005. Amazon’s shares gained 1.6 percent to $243.62.

Cyber Monday has been the biggest online shopping day in recent years, as workers return to offices and use computers to make holiday purchases. ComScore expects online sales to hit a record of about $1.5 billion by day’s end.

Online sales were up 25.6 percent as of 3:00 pm EST on Monday, compared with the same period a year ago, according to International Business Machines Corp which tracks transaction data from 500 U.S. retail websites. In 2011, Cyber Monday year-over-year growth was 15 percent by 3:00 pm, IBM said.

Strong online sales growth on Thanksgiving Day and “Black Friday” sparked concern that shoppers were just buying earlier, threatening revenue later in the season.

“So far, that is not the case,” said Jay Henderson, the strategy director for IBM Smarter Commerce. “Extending the shopping season has really just fueled additional online spending rather than cannibalizing days later in the season.”

ChannelAdvisor said client sales – or sales generated by third-party merchants using the company’s software – soared 57 percent on eBay.com early on Monday, compared with the same period in 2011.

The growth rate was five times higher than during the same period last year, said ChannelAdvisor, which helps merchants sell more online.

“The early eBay numbers are impressive,” said R.J. Hottovy, an equity analyst at Morningstar. “They put together an effective marketing plan across several channels this holiday season – online, television and print.”

EBay has been trying to move away from its online auction roots, emphasizing new items selling at fixed prices to better compete with Amazon.

“The numbers suggest they’re having success reintroducing consumers to the ‘new eBay,’” Hottovy said.

PayPal, the payments division of eBay, said the volume of mobile transactions it processed by 2:00 pm EST on Cyber Monday almost tripled versus the same period last year.

Client sales on Amazon.com were up 52 percent during the first part of Cyber Monday, ChannelAdvisor also reported.

“Amazon continues to look impressive to us since it is building on top of large numbers,” said Scott Tilghman, an analyst at Caris & Company.

Discounts

Online retailers held back some of their best promotions and biggest discounts until Cyber Monday, which helped spur sales, IBM’s Henderson and ChannelAdvisor’s Wingo said.

Amazon offered $30 off its 7 inch Kindle Fire tablet, which usually sells for $159. The deal was only available on Cyber Monday and was still available at 5:00 pm EST.

EBay promoted Cyber Monday deals on iPads, made by Apple Inc, and Nook devices from Barnes & Noble.

These types of discounts attract shoppers to Amazon and eBay’s websites, where they may purchase other items too, Wingo explained.

‘WII U’ sells out

EBay has also benefited as some hot holiday items sold out this year at some retailers. When that happens, shoppers often turn to eBay, where third-party sellers are usually still offering the items at higher prices.

Nintendo Co Ltd said on Monday its new “Wii U” video game consoles sold out at retailers in the United States.

The devices were still available on ebay.com on Monday at 10 to 20 percent above the suggested retail price, according to Jesse Divnich, an analyst at video game research firm EEDAR.

Margin question

Despite strong sales data, analysts are concerned that heavy discounting may pressure retailers’ profit margins, online and offline.

The average online order size on Cyber Monday was $130.30 as of 3:00 pm EST. That was down from almost $200 during the whole of Cyber Monday last year, according to IBM.

Online order sizes are shrinking as consumers buy more digital goods, such as e-books, music and video, which generally cost less. However, discounting is also pressuring order size and that could feed through to lower margins, Morningstar’s Hottovy said.

EBay margins should be relatively well protected because the company charges a commission on sales by third-party merchants and retailers.

Amazon operates like this, but, unlike eBay, the company also has its own product inventory so it may be exposed to margin pressure, according to Colin Sebastian, analyst at R.W. Baird.

source: interaksyon.com

Why Retailers Can’t Wait Until Election Day

Retailers are known to play the blame game when it comes to their sales numbers. They will point the finger at Mother Nature for being too hot or rainy, Hollywood for releasing a blockbuster and distracting shoppers and even consumers themselves for being too bargain hungry, hurting their margins. But they might have a legitimate excuse during the campaign season.

According to ShopperTrak, shopping activity decreases during a campaign cycle. During the 2004 presidential election, retailers experienced a 0.7% year-over-year decline in sales and a 2.2% drop off the week before Election Day. In 2008, foot traffic dropped off 3.7% the week before the election and 6.3% the week of the election, when compared with the same period the year before.

“As we get closer to the day, retailers will struggle to find air time between all the political aids running and get consumers’ attention,” says Bill Martin, ShopperTrack’s founder. “Consumers get bombarded and consumed with the election coverage…just look at the first debate, it brought in 60 million viewers who weren’t out shopping.”

Shoppers tend to go “on hold” during the campaign, according to Pam Danziger, president of Unity Marketing. “People are on pins and needles, everybody has a hat in the game and that shifts their primary focus to necessity buying — they are still going to need milk and gas, but they tend to put on hold shopping trips and weekend getaways until they know who is going to be elected.”

Thankfully for retailers, Martin says the pent-up demand will make up for the lost revenue. “We see it released immediately after the election no matter which party wins. Be prepared for the weekend following the election to be a big shopping day -- that will be the start of the holiday season in earnest.”

While retailers might enjoy the boon, it might be short lived. According to Steve Pruitt, founder and senior consultant of Blacks Retail, there is a pattern of down sales the year after an election. “Every year since 1950, except for two in which the economy was experiencing a recovery, there was a downturn in retail sales. I expect the rate to slow for sure in 2013 and it could go negative based on the ineptitude of the government.”

Spending Power

American Express Publishing and Harrison Group released a study this week highlighting that holiday spending will tick up 33.5% to $3.4 billion among the top 1% of earners. On the flip side, the study showed the rest of consumers planning to spend 3.4% less this season.

“When you look at raw data, retail is up 5% year-over-year, and that’s a big number, but if you look at this same time last year, it was up 7.5% from 2010, so the real question is how strong is this recovery?” says Danziger.

She points out that the middle-class's drop in income puts more pressure on the economy and  on retailers to attract wealthy shoppers. 

“The middle class has seen its income drop 4% and that is a terrible sign for retailers and the economy. The affluent ones are the ones who have the money left and can turn on and off the spigot in terms of spending, and if they feel embattled or under attack from the White House they aren’t going to spend as much. They can afford to hold out.” 

Experts agree that the election process weighs more heavily on retailers than the results — it’s  the certainty of knowing who will occupy the Oval Office that will calm fears.

“Retailers looking into future investments want to have a clear direction and if they don’t see a clear picture then they won’t do anything, they hold back, which holds back growth,” says Pruitt. “Businesses aren’t going to take risks over growth if they don’t know what is going to happen.”

Bargain-seeking shoppers worried about the election over shadowing or reducing Black Friday advertisements don’t need to fear. Black Friday has become so engrained in our society that nothing will impact the deals and the two weeks after Election Day and the shopping event is plenty of time to spread the word.

“When you think about all the people sitting around the Thanksgiving table the conversation will eventually roll around to how early people are setting out and what they are trying to get. It’s know part of the holiday,” says Martin.

source: foxbusiness.com

Apple sells 2 million new phones, sets early order record

Demand for Apple Inc’s new iPhone 5 has exceeded initial supply as the company booked 2 million orders in one day and pushed the delivery date for some preorders to next month.

Apple said on Monday that it would deliver most preordered phones as planned by Friday, the first day of delivery, but many would not be available until October.

It is not unusual for Apple products to sell out the first day. Last October, the company booked 1 million orders for the previous iPhone, the 4S, in the first 24 hours. That beat Apple’s previous one-day record of 600,000 sales for the iPhone 4.

Shares of Apple were up 1 percent at $698.50 in early trading on Monday.

The latest strong preorders could mean a strong holiday quarter for Apple. The iPhone is the marquee device for the company and accounts for half of its revenue.

Given the demand for the device so far and Apple’s aggressive rollout of it internationally, some analysts raised their sales estimates.

Canaccord Genuity technology analyst Michael Walkley said he now expected Apple to ship 9 million to 10 million iPhone 5s from Friday to September 29, the last day of fiscal 2012.

Baird Equity Research William Power estimates that Apple may have booked sales of roughly 5 million iPhone 5s in the first three days. Last year, it sold 4 million iPhone 4S units in that time.

The new phone, which will appear in stores on Friday for walk-in purchases, has a larger, 4-inch screen and is slimmer and far lighter than the previous model. The iPhone 5 supports the faster 4G network and also comes with a number of software updates, including Apple’s new in-house maps feature.

Apple began taking orders for the iPhone 5 at midnight Pacific time on Friday (0700 GMT Saturday). Shipping dates for the smartphone slipped by a week within an hour of the start of preorders.

On Monday morning, Apple’s U.S. store, at www.apple.com, showed preorders placed at that time would take two to three weeks to ship.

AT&T sets sales record

AT&T, the No. 2 U.S. mobile service provider, said demand over the weekend had made the iPhone 5 the fastest-selling iPhone the company has ever offered.

AT&T did not disclose how many iPhones it had sold, but said the iPhone 5 was still available for preorder and would go on sale September 21 at AT&T retail stores.

The phone’s other carriers, Verizon Communications Inc and Sprint Nextel Corp, also showed similar delays in shipping the phone.

European carriers also reported brisk sales. France Telecom’s Orange said bookings for the new phone “have been very strong, breaking the records of what we saw for the iPhone 4 or 4S.” But the carrier said it could deliver preorders on time.

Apple previously said it would start shipping the iPhone 5 by September 21 in the United States and most of the major European markets, such as France, Germany and the UK. The phone goes on sale on September 28 in 22 other countries.

Analysts have forecast that Apple will have sold more than 30 million iPhones, including older models, by the end of September.

source: interaksyon.com

P&G loses Pringles, gains in 4Q

NEW YORK - Procter and Gamble, the US consumer-products giant, on Friday posted a sharp rise in earnings for its fiscal fourth quarter, boosted by the sale of its snacks business.

P&G said net profit rose 45 percent from the year-ago quarter to $3.6 billion.

The sale of its Pringles potato-chip business to The Kellogg Company for $2.7 billion in an all-cash transaction added a net gain of 48 cents per share, P&G said.

Excluding one-time items, earnings per share were 82 cents in the April-June quarter, well above the average analyst estimate of 77 cents.

Net sales fell 1.0 percent to $20.2 billion, slightly missing expectations of $20.3 billion.

P&G, the maker of Gillette razors, Tide laundry detergent, Crest toothpaste and other consumer products, said the decline was primarily due to a negative foreign exchange impact, which reduced sales by four percent.

The Cincinnati, Ohio-based company, which has a presence in about 180 countries, has been battling rising commodity costs and a stronger dollar.

Sales growth increased in four of the company's five business segments compared with a year ago.

"Despite a difficult macro environment, we see significant opportunities for top- and bottom-line growth," said chief executive Bob McDonald in a statement.

"We enter fiscal 2013 with very strong developing market momentum, strengthened plans on our core developed market business, and with the benefit of a $10 billion cost-savings program, which is well under way," he said.

For its first fiscal quarter, from July to September, P&G predicted earnings per share of 83 cents to 91 cents and net sales growth down as much as six percent.

"A major driver of the lower first-quarter EPS outlook is foreign exchange, which is forecast to reduce net earnings by five to six percent versus the prior year," it said.

The company said it will repurchase $4 billion in P&G stock during the fiscal year.

Shares in P&G were up 0.9 percent at $63.51 in pre-market trade in New York.

source: interaksyon.com

Nintendo posts first-ever annual loss

TOKYO — Japanese game giant Nintendo on Thursday posted its first-ever annual loss since becoming a public company, blaming a soaring yen and price cutting on its consoles.

The Kyoto-based company said it lost 43.2 billion yen in the fiscal year through March, reversing a year-earlier profit of 77.62 billion yen, although the result was not as bad as the 65 billion yen loss it had forecast this year.

The firm went public in the early 1960s, according to its website.

Nintendo said sales dropped 36.2% from the previous year to 647.65 billion yen, adding that it “could not recover from a sales slump of Nintendo 3DS consoles in Europe and in the United States in the early fiscal year.”

For its current fiscal year, Nintendo forecast a return to profit, booking earnings of 20 billion yen on sales of 820 billion yen.

The company in August cut the price of its new Nintendo 3DS console from 25,000 yen to 15,000 yen in Japan, followed by similar reductions overseas as it struggled to boost sales going into the key Christmas season.

But the move failed to make up for the poor take-up seen earlier in the year, as the company battles tough competition from smartphones, tablet computers and social networking websites.

source: japantoday.com