On Tuesday, Pepsi (PEP) reported a massive $1.4 billion
charge for its business in Venezuela, citing the country's uncertain currency,
economy and political outlook. It's another sign that Venezuela's skyrocketing inflation,
confusing currency laws and plummeting economy are weighing down major U.S.
companies. Sales in Venezuela only make up 2% of Pepsi's revenue. In the third
quarter, Pepsi's total revenue was $16.3 billion. By that math, Pepsi only got
$326 million in sales from Venezuela while it took a $1.4 billion charge from
its business there. The one-time charge
-- or "write down" -- helps the company offer investors more
certainty about its future earnings. More…
Wednesday, October 7, 2015
Pepsi has a Venezuela problem: $1.4 billion
On Tuesday, Pepsi (PEP) reported a massive $1.4 billion
charge for its business in Venezuela, citing the country's uncertain currency,
economy and political outlook. It's another sign that Venezuela's skyrocketing inflation,
confusing currency laws and plummeting economy are weighing down major U.S.
companies. Sales in Venezuela only make up 2% of Pepsi's revenue. In the third
quarter, Pepsi's total revenue was $16.3 billion. By that math, Pepsi only got
$326 million in sales from Venezuela while it took a $1.4 billion charge from
its business there. The one-time charge
-- or "write down" -- helps the company offer investors more
certainty about its future earnings. More…
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