Headlines this morning include earnings from Pepsi, General Motors and Rio Tinto, mergers in the beer, airline and condiment industries and a new CEO for Coach.a
Drink snackifier PepsiCo (PEP) reported earnings of $1.06 per share for the fourth quarter, or $1.09 per share. Analysts had expected EPS of $1.05 per share. Revenue was $20 billion, compared to a mean estimate for $19.8 billion. The company also said it expects to earnings to rise by 7 percent in 2013, which implies 44.39 per share, in line with estimates. The company announced that it will raise its dividend by 5.6 percent to $2.27 per share beginning in June. The company also announced plans to repurchase up to $10 billion in common stock between July 1, 2013 and June 30, 2016.
Beer giant Anheuser-Busch InBev (BUD) is altering the terms of its proposed acquisition of Grupo Modelo from Constellation Brands (STZ). The original deal was rejected by antitrust regulators. The altered proposal calls for InBev to sell the Piedras Negras brewery and perpetual U.S. rights for the Corona and Modelo brands to Constellation for $2.9 billion. That brewery makes Corona, Corona Light and Modelo Especial. Ownership of the facility will give Constellation complete control over production of Corona and Modeelo in the U.S.
General Motors (GM) reported fourth-quarter net income of 54 cents per share, or 48 cents on an adjusted basis, missing the mean analyst estimate for 51 cents. Revenue rose to $39.3 billion, topping estimates for $39.15 billion. The company's results were hurt by widening losses in Europe.
Luxury-goods maker Coach (COH) announced Thursday that longtime CEO Lew Frankfort will be leaving the company at the end of 2014. Frankfort will be replaced by Victor Luis, who is currently the head of international operations.
Polish airline LOT announced Thursday that it will keep both of the Boeing (BA) 787 Dreamliners it operates on the ground through October as Boeing works to resolve problems with the plane's batteries.
Mining concern Rio Tinto (RIO) said Thursday that it lost $3 billion in 2012 after writedowns totaling $14 billion in connection with the company's aluminum business and the acquisition of a coal company in Mozambique. Underlying earnings were $9.3 billion, a 40% drop from the previous year. The decline was largely due to lower commodity prices. Sam Walsh, the company's CEO said the company plans to cut costs by $5 billion.
Condiment conglomerate Heinz (HNZ) has agreed to be acquired by Warren Buffett's Berkshire Hathaway (BRK.A) and 3G Capital for $72.50 per share, or a total of $28 billion including debt. The purchase price represents a 19.9 percent premium to Wednesday's closing price. Buffett appears to be planning on taking a role as silent partner in the deal, telling CNBC that “Heinz will be 3G's baby” from an operational standpoint.
The long-rumored merger of U.S. Airways Group (LCC) and American Airlines was officially announced Thursday morning. The combination will result in the world's largest airline with a combined equity value of $11 billion. The majority of the new company will be owned by creditors, unions and employees of AMR Corp., the parent company of American Airlines. AMR filed for Chapter 11 bankruptcy in November 2011.