PepsiCo Inc. said cost savings and revenue growth from its acquisition of Quaker Oats Co. would be almost double its initial expectations, but the company maintained its outlook for earnings growth from the deal.
The world's fifth-largest food and beverage company said it now expects $400 million in synergies, up from $230 million it previously forecast. Most of that increase comes from lower purchasing costs.
In a presentation to analysts, the company said it still foresees 2002-05 annual earnings growth of 13% to 14%.
The company cautioned analysts not to raise estimates for 2002 earnings, as a possible value-added tax on its snack foods in Mexico, an accounting change and spending on new growth initiatives might temper growth. Analysts forecast earnings of $1.80 to $1.90 a share, with a consensus of $1.86, according to Thomson Financial/First Call.
PepsiCo shares fell 61 cents to close at $45.05 on the NYSE. The stock has risen about 3% since the Quaker deal was first announced in December.