PepsiCo 3Q profit climbs on snack, beverage sales

[October 12, 2011]  PURCHASE, N.Y. (AP) -- PepsiCo Inc.'s third-quarter profit rose 4 percent because of higher prices and rising sales of its snacks and beverages, especially overseas.

Food and beverage companies like PepsiCo have been raising prices to offset higher costs for ingredients, packaging and fuel. They have also increasingly relied on business abroad to help their performances, as U.S. consumers keep a lid on spending because of economic concerns and high unemployment.

PepsiCo, based in Purchase, N.Y., reported Wednesday that it earned $2 billion, or $1.25 per share, for the period ended Sept. 3. That's up from $1.92 billion, or $1.19 per share, a year ago.

Excluding acquisition-related charges and other one-time items, earnings were $1.31 per share. Analysts surveyed by FactSet expected $1.30 per share.

PepsiCo's stock added 55 cents to $61.50 in premarket trading.

Revenue climbed 13 percent to $17.58 billion. That topped analyst expectations for $17.11 billion in revenue.

"We had strong revenue growth across our product portfolio and across our key geographic markets," Chairman and CEO Indra Nooyi said in a statement.

The biggest gains came overseas, with Europe reporting a 37 percent revenue increase because of higher prices and the addition of Russian juice and dairy company Wimm-Bill-Dann. Revenue for Asia, the Middle East and Africa rose 25 percent on increased prices and volume growth, particularly in emerging markets.

In the Frito-Lay North America segment, revenue rose 4 percent on strong sales of its Lay's Doritos, Cheetos and Ruffles brands. The Latin America Foods unit posted a 19 percent increase in revenue, led by Mexico and Brazil.

Revenue for Quaker Foods North America edged up 2 percent on higher prices and cost controls.

PepsiCo Americas Beverages posted a 3 percent revenue increase, partly on higher prices. Gatorade led volume growth for non-carbonated beverages such as juices and sports drinks in North America.

Worldwide snacks volume increased 8 percent, helped by the Wimm-Bill-Dann acquisition. Worldwide beverage volume climbed 4 percent, also benefiting from the buyout. PepsiCo said its volume gains were driven by growth in emerging markets.

For the full year, PepsiCo maintained its forecast for high-single-digit earnings growth.

[Associated Press]

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