PepsiCo and Coca-Cola hit by digital switchover

Blame the robots for the restructuring of Big Soda.

In just a few weeks, investors learned that spending money on everyday consumer goods no longer made predictable results possible with the move to digital shopping. This consumer migration has resulted in fewer trips to the grocery center, where major brands such as PepsiCo, Hershey and Coca-Cola have taken up residence.

Increasing employee costs, transportation costs and volatile currency conversions make it difficult for these major food brands.

But it's the digital shift that undoubtedly causes the biggest problem for Big Soda in particular. As a result, Big Soda has resulted in major restructuring projects to protect long-term profits.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "PepsiCo becomes leaner"data-reactid =" 19 ">PepsiCo becomes leaner

More

The giant soda and snacks Friday revealed that he needed $ 2.5 billion in charges by 2023 to restructure his business. PepsiCo estimates that these efforts will bring savings of at least $ 1 billion a year until 2023.

"The expected savings from certain restructuring actions to enable the company to take advantage of new technologies and business models to contribute to simplification, harmonization and process automation contribute to Purpose of productivity. rethink our market and information systems, including deploying the appropriate automation for each market; simplifying our organization and optimizing our manufacturing and supply chain footprint, "PepsiCo said in a statement.

No details were shared on potential job losses related to moves.

The details of the restructuring follow a contrasted fourth quarter for PepsiCo.

PepsiCo reported fourth-quarter adjusted earnings of $ 1.49 per share, which is in line with analysts' forecasts. Sales reached 19.52 billion dollars, against 19.51 billion dollars for Wall Street analysts.

Sales of organic products increased in all segments during the quarter, with the exception of a 2% decline in Quaker Foods North America. The operating profits of the division decreased by 1%. The beverage sector in North America experienced a modest organic increase of 0.5% organic sales. The operating profits of the company decreased by 14%.

The company expected earnings of $ 5.50 per share for 2019, below $ 5.86 per share. PepsiCo announced organic growth in long-term sales of 4% to 6%. The company also added that it hoped to regain long-term growth in its high single-percentage base earnings.

PepsiCo action rose 3% on Friday as analysts hoped that cost cutting would boost profits over time. Bonnie Herzog, beverage analyst at Wells Fargo, said PepsiCo's poor 2019 forecast was expected by the market.

<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Coca-Cola surprises investors"data-reactid =" 39 ">Coca-Cola surprises investors

Coca-Cola also pressed the reset button for its earnings outlook in the changing context of its business.

The company said Thursday that it saw its 2019 earnings down 1% to gain 1% from earnings of 2.08 per share in 2018. Wall Street analysts expected earnings per share of 2.24 dollars. Coke lost up to 8% on Thursday's session.

Wells Fargo's Herzog described these prospects as "worrying" and "surprising". Maybe Coke should not have tackled many structural problems as a longtime PepsiCo foe.

While Coke's CEO, James Quincey, did his best to reassure Wall Street during a conference call, it was mostly in the ears of a deaf person. Quincey took advantage of the company's sales momentum behind brands such as Diet Coke and initiatives to stop the sale of slow items.

Quincey, however, said his team was looking for $ 600 million in new cost savings in 2019. These savings are part of a $ 3.8 billion cost reduction plan unveiled by Coke in 2017, primarily focused on on the sale of its capital-intensive (re-franchise) bottling operations.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Brian Sozzi is a senior editor at Yahoo Finance. Follow him on Twitter @BrianSozzi"data-reactid =" 45 ">Brian Sozzi is a senior editor at Yahoo Finance. Follow him on Twitter @BrianSozzi

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Read the Yahoo Finance exclusives:"data-reactid =" 46 ">Read the Yahoo Finance exclusives:

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "CEO of PayPal: The closure of the government does not harm our company"data-reactid =" 47 "> PayPal CEO: Government Closure Does Not Harm Our Business

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Chairman of the Federal Reserve Minneapolis: a break from interest rates is needed"data-reactid =" 48 "> Chairman of the Federal Reserve Minneapolis: a break from the interest rate is necessary

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Hasbro CEO: we will regain growth in 2019"data-reactid =" 49 "> Hasbro CEO: we will regain growth in 2019

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "CEO of Macy: Mobile shopping is booming"data-reactid =" 50 "> Macy's CEO: Mobile shopping is booming

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Procter & amp; Gamble CEO: We do not divide society"data-reactid =" 51 "> CEO of Procter & Gamble: We do not separate the company

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "CEO of Coca-Cola: Why not get into the alcohol business"data-reactid =" 52 "> Coca-Cola CEO: Why not get into the alcohol business