PepsiCo profit beats estimates on stronger Frito-Lay demand

Thu Apr 23, 2015 10:25am EDT
 
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By Anjali Athavaley and Shailaja Sharma

(Reuters) - PepsiCo Inc reported better-than-expected first-quarter profit, helped by stronger demand for its Frito-Lay snacks in North America and price increases in its beverage business.

Revenue in the Frito-Lay business rose 3.1 percent to $3.32 billion partly on new product launches like Cheetos Sweetos, a sweet version of the salty snack, and Rold Gold Pretzel Dippers.

Beverage revenue, which has been hurt by a long-term decline in U.S. soft drink sales, rose marginally to $4.43 billion due to a 3 percent increase in overall prices.

"The Americas did terrifically well," Chief Financial Officer Hugh Johnston said in an interview. "Frito-Lay picked up from a volume perspective."

Demand was weak in Europe, where the company raised prices as a result of currency impacts, he added.

PepsiCo's net revenue fell 3.2 percent to $12.22 billion in the quarter, for the first time in four quarters. The cited a stronger dollar, adding that revenue rose 4.4 percent, excluding results from mergers, acquisitions or takeovers.

At least 30 percent of revenue comes from outside North America.

Rival Coca-Cola Co reported a rise in revenue for the first time in nine quarters on Wednesday, helped by a 6 percent increase in North America, its biggest market.   Continued...

 
Cases of Pepsi are displayed for sale in Carlsbad, California February 7, 2012. PepsiCo Inc. will report their earnings February 9. REUTERS/Mike Blake