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EARNINGS

PepsiCo Up 17%, Topping Forecasts; WellPoint Gains 1.1%

May 01, 1996|From Times Wire Services

PepsiCo said Tuesday that its first-quarter earnings rose 17% on strong sales and profit gains at all three of its business lines.

The beverage, snacks and restaurant company had profit from operations of $373 million, or 47 cents a share, compared with $319 million, or 40 cents, a year earlier. The results matched the average estimate of 15 Wall Street analysts.

PepsiCo reported larger-than-expected profit or sales gains in all of its businesses, cutting through snags that dragged down earnings last year. Even though PepsiCo said earnings growth may not be as high the rest of the year, several analysts raised their earnings estimates on optimism that the gains will continue.

Sales at PepsiCo, which, in addition to soft drinks, sells Frito-Lay snacks and operates the KFC, Taco Bell and Pizza Hut restaurant chains, rose 6.4%, to $6.55 billion from $6.16 billion.

PepsiCo bought 5.4 million of its own shares in the first quarter and 5 million so far in the second quarter. In all of last year, it bought 12 million shares. While the company is increasing its buyback this year, it may not do so in years to come, said Margaret Moore, vice president for investor relations.

PepsiCo lowered its forecast for net interest expenses this year to $540 million. It had $555 million in expenses last year.

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WellPoint Health Networks said first-quarter profit rose 1.1%, beating analysts' estimates, due partly to an 8% enrollment increase in its managed-care plans open more than a year.

Woodland Hills-based WellPoint said it earned $60.1 million, or 60 cents a share, compared with $59.5 million, or 60 cents, in the first quarter of 1995.

Wall Street had expected earnings of 56 cents a share, based on the average estimate of analysts.

Membership in health plans rose by 1.1 million to 3.9 million, mostly because of the 1 million members added in its March 31 acquisition of Massachusetts Mutual Life Insurance's life and health unit.

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Iwerks Entertainment said it rebounded to a fiscal third-quarter profit on higher revenue from its touring theaters.

The Burbank-based maker of big-screen theater attractions and ride simulators also said it signed a joint-venture agreement with restaurant chain Dave & Buster's and will invest as much as $7 million to build theaters in Asia and the U.S.

Iwerks said it had net income of $1.38 million, or 12 cents a share, contrasted with a loss from operations of about $2 million, or 25 cents, in the year-ago period. Iwerks was expected to earn 9 cents a share for the quarter.

At a Glance:

Live Entertainment said net income for the quarter was $967,000, or 10 cents a share, compared with $4.9 million, or $1.02 per share, for the year-ago quarter.

Cigna said first-quarter earnings rose 50% to $219 million, or $2.85 a share, from $146 million, or $2.02, in the year-earlier period.

Estee Lauder said its fiscal third-quarter earnings rose 38% to $28.2 million, or 19 cents a share, from $20.5 million a year earlier.

PacfiCare Health Systems said fiscal second-quarter profit rose 16% to $31.9 million, or $1.01 a share, from 27.4 million, or 96 cents, in the year-earlier quarter.

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