PepsiCo profit beats estimates on stronger Frito-Lay demand
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...