PepsiCo First-Quarter Sales Rise 27%; Profit Beats Estimates
PepsiCo Inc., the world’s largest snack-food maker, reported a 27 percent gain in first-quarter sales, bolstered by purchases in international markets.
PepsiCo’s sales rose to $11.9 billion, compared with the $11.8 billion average of estimates compiled by Bloomberg. Excluding items such as integration costs and hedges, profit was 74 cents, compared with the 73-cent analyst average.
PepsiCo, led by Chief Executive Officer Indra Nooyi, has developed new flavors to appeal to markets internationally, relying on chip sales overseas to make up for slower beverage sales volumes in North America. Volume in the Latin American foods business climbed 2 percent.
“Pepsi is an emerging-markets play, and its investments in Asia, Latin America and Europe appeared to pay off in the first quarter,” Philip Gorham, a senior equity analyst for Morningstar Inc. (MORN) in Chicago, said in a report today.
PepsiCo, also the world’s second-largest soft drink maker, rose $1.79, or 2.6 percent, to $69.72 at 4:02 p.m. in New York Stock Exchange composite trading. PepsiCo has advanced 6.7 percent this year, compared with a 2.5 percent gain for Coca- Cola Co.
PepsiCo reiterated its forecast for 2011 earnings per share growth of 7 percent to 8 percent, excluding some costs and foreign-currency effects. That amounts to profit of as much as $4.46 a share, compared with the $4.48 average of analyst estimates.
Net Income
Net income fell to $1.14 billion, or 71 cents a share, from $1.43 billion, or 89 cents, a year earlier, Purchase, New York- based PepsiCo said today in a statement. The company had an accounting gain of $958 million in the year-earlier period.
PepsiCo generates about two-thirds of its sales from food and snacks, including Frito-Lay chips and Quaker cereals. Sales split almost evenly last year between U.S. and international markets.
Volume sales of PepsiCo beverages in North America grew 2 percent. Last year, Nooyi acquired PepsiCo’s two largest bottlers to squeeze more profit from its distribution system.
PepsiCo will raise prices on food and beverages to help make up for increasing costs for corn, packaging plastic and other commodities, Chief Financial Officer Hugh Johnston said today in an interview. He reiterated during a conference call that commodity costs will rise by $1.4 billion to $1.6 billion this year, from a base of $18 billion.
Rival Coca-Cola Co. (KO) said this week that it’s increasing prices as materials costs surged more than expected. Costs for the world’s largest soft drink maker will rise by as much as $700 million this year, according to estimates from Chief Financial Officer Gary Fayard.
Atlanta-based Coca-Cola said this week that profit advanced 18 percent to $1.9 billion, or 82 cents a share. Excluding some items, profit was 86 cents, compared with the 87 cents analysts estimated.
To contact the reporter on this story: Duane Stanford in Atlanta at dstanford2@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net
PepsiCo First-Quarter Sales Rise 27%; Profit Beats Estimates
Jin Lee/Bloomberg
PepsiCo, also the world’s second-largest soft drink maker, rose 22 cents to $67.93 yesterday in New York Stock Exchange composite trading.
PepsiCo, also the world’s second-largest soft drink maker, rose 22 cents to $67.93 yesterday in New York Stock Exchange composite trading. Photographer: Jin Lee/Bloomberg
PepsiCo Chief Executive Officer Indra Nooyi
Andrew Harrer/Bloomberg
PepsiCo Chief Executive Officer Indra Nooyi.
PepsiCo Chief Executive Officer Indra Nooyi. Photographer: Andrew Harrer/Bloomberg
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