Pepsi Stock Fizzles ??

Pepsi Pours Unusually Wide Outlook

4Q NET FALLS ON CHARGES, OPERATING RESULTS MATCH FORECASTS

Pepsico (PEP) used to enjoy a reputation for being able to anticipate its case volume with canny accuracy. It never ordered more bottle caps than it did bottles. (Truth be told, that’s the task of its bottling partners, but we’re stretching for a metaphor here, so go with it.) So it’s a little unsettling to hear the company talking about growing operating EPS by the mid- to high- single-digits this year. For the soft drink maker, that’s a surprisingly wide forecast.

The good news is that, regardless of where those earnings alight exactly, they’re likely healthier than analysts have been forecasting. Estimates have called for EPS growth of 4% to some $3.81 for the year. Even a mid-single-digit profit improvement would likely eclipse that number.

But the company’s optimism has been mitigated. There’s non-operating issues, such as restructuring charges and hedging losses, which caused Pepsi’s fourth quarter net to fall 43%. There’s also the headwind caused by the stronger dollar.

Fundamentally, Pepsi sounded a cautious note about the start of the year, saying that the first half - and first quarter, in particular - represented the most difficult year-over-year comparisons it’s experienced in years. And that’s with North American beverage volumes, which declined 6% in the fourth quarter, having declined sharply last year.

The mixed messages effectively have put a hold on the stock in Friday’s early trading, leaving shares flat at $52, after the stock crashed to a low for the year south of $50 earlier this month. Pepsi is a good play for 2009 !, w/ a good Dividend!