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Shares of the company, which also makes Gatorade energy drinks
and Tropicana fruit juices, rose 1 percent in premarket trading
on Monday.
PepsiCo has handled sliding demand for fizzy sodas better than
rival Coca-Cola Co <KO.N> as its snacks business has offset much
of the impact of a shift in consumer preference to drinks such
as teas and fruit juices.
"We broadened our beverage portfolio to lessen our reliance on
colas..." PepsiCo said in a statement, adding that just 12
percent of its revenue now comes from Pepsi colas, and less than
25 percent from fizzy drinks globally.
Sales in PepsiCo's North America snacks business, which accounts
for more than a quarter of its total revenue, rose nearly 3
percent in the first quarter ended March 19.
Cost of sales fell 6.4 percent, with the company benefiting from
lower prices of raw materials, including sugar.
PepsiCo's results marked a "very classic Pepsi quarter," UBS
analyst Stephen Powers said, adding that the numbers showed the
company's cost-control efforts were paying off.
However, PepsiCo's total sales fell 3 percent to $11.86 billion,
the sixth straight quarter of decline, hurt by a strong dollar
and weakness in some markets including Latin America and Europe.
Sales slumped more than 26 percent in Latin America, partly due
to the exclusion of its Venezuelan business. Sales fell 9.1
percent in Europe and sub-Saharan Africa.
The net income attributable to PepsiCo declined nearly 24
percent to $931 million, or 64 cents per share, mainly due to an
impairment charge of $373 million related to its interest in
Tingyi-Asahi Beverages Holding Co Ltd.
Excluding items, PepsiCo earned 89 cents per share, beating the
average analyst estimate of 81 cents, according to Thomson
Reuters I/B/E/S.
Excluding the impact of currency movements, acquisitions and
divestitures, sales rose 3.5 percent.
PepsiCo shares were trading at $104.78 before the bell.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by
Kirti Pandey)
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