Purchase, N.Y., June 16 - PepsiCo announced today that its Quaker manufacturing facility located in Cedar Rapids, IA, has been impacted by the historic flooding in the area.
The facility was closed on Wednesday, June 11, but engineers and safety resources have now been able to tour the facility. While the situation assessment is ongoing, PepsiCo expects disruptions to normal service over the next few weeks, including product allocation to the retail trade of some Quaker foods and snacks items. The business has dedicated resources to ensure a speedy return to full production and also has redirected some production to other Quaker facilities. The Company has insurance covering both the facility and business interruption.
Flooding in many areas of the Midwest has also impacted grain plantings. As previously indicated during its Q1 earnings call, the Company is largely covered on key commodities through 2008. Our coverage on corn extends into 2009.
In comments during this week's meetings with investors in London and at The Deutsche Bank Global Consumer and Food Retail Conference in Paris, PepsiCo's Chief Financial Officer Richard Goodman will express confidence in the Company's business outlook and, consistent with last week's press release, confirm its full-year 2008 guidance. The Company expects 2008 earnings per share of at least $3.72 -- unchanged from its previous guidance.