Profit excluding some items was 69 cents a share, Purchase, New York-based PepsiCo said today in a statement. That exceeded the 67-cent average of 14 analysts’ estimates compiled by Bloomberg. Net income in the quarter fell 1.4 percent to $1.13 billion, or 71 cents a share, from $1.14 billion, or 71 cents, a year earlier.
Chief Executive Officer Indra Nooyi is increasing distribution of snacks and introducing new flavors in emerging markets to boost sales. The company also is cutting 8,700 jobs and raising marketing spending by $600 million this year to increase U.S. beverage sales and regain market share from leader Coca-Cola Co. (KO)
“While we don’t think that most skeptics will be convinced yet, numbers are slightly better than expected on both the top and bottom lines,” John Faucher, a New York-based analyst for JPMorgan Chase & Co., said today in a note. Faucher rates the shares overweight, the equivalent of a buy.
First-quarter sales rose 4.1 percent to $12.4 billion. Net revenue in the company’s Latin America Foods unit rose 11 percent after it boosted pricing by the same amount. Beverage sales volumes in Mexico grew at a double-digit percentage rate.
Pricing increased 5.5 percent globally, helping to recoup some of the $300 million in higher commodity costs.
Chief Financial Officer Hugh Johnston said in a Bloomberg Television interview today that he doesn’t anticipate additional pricing gains this year.
PepsiCo also reiterated its forecast that earnings per share excluding some costs and foreign-currency effects would decline 5 percent this year and grow at a high-single digit percentage rate starting next year.
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