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PepsiCo said on Tuesday that sales in its North America beverage
unit, the company's largest, rose 2 percent to $5.24 billion in
the second quarter ended June 17. While volume sales were flat,
net pricing was up 1 percent.
PepsiCo and rival Coca-Cola Co <KO.N> have focused on selling
smaller, higher-margin packs in developed markets while pulling
back on promoting large discount packs as they look to cushion
the impact of falling demand for fizzy drinks.
Revenue from PepsiCo's Frito-Lay North America business rose 3
percent, helped by a 1 percent rise in volume and a 3 percent
rise in net pricing.
The company said in May it would sell its 4.5 percent stake in
British bottler Britvic for an undisclosed amount.
Net income attributable to PepsiCo rose to $2.11 billion, or
$1.46 per share, from $2.01 billion, or $1.38 per share, a year
earlier.
Excluding items, the company earned $1.50 per share.
Revenue rose 2.1 percent to $15.71 billion.
Analysts on average had expected earnings of $1.40 per share on
revenue of $15.60 billion, according to Thomson Reuters I/B/E/S.
However, gross margins fell 50 basis points in the quarter,
compared with a 115 basis points expansion in the year-earlier
quarter.
The company had said in April it expected margins to remain
under pressure in the second quarter as it passes on higher
commodity prices to consumers.
PepsiCo raised its adjusted profit forecast for 2017 to $5.13
per share from $5.09, citing lower impact from unfavorable
foreign exchange.
PepsiCo's shares were little changed in premarket trading on
Tuesday.
(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by
Martina D'Couto)
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