PepsiCo income rises with strength from higher prices

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PURCHASE, N.Y. — Price increases and productivity efforts contributed to a 35% increase in income at PepsiCo, Inc. during the second quarter.

For the quarter ended June 15, the company had income of $2,010 million, equal to $1.28 per share on the common stock, which compared with $1,488 million, or 94c per share, during the same quarter of the previous year. Revenue for the quarter was $16,807 million, up 2% from $16,458 million during the same quarter of the previous year.

“PepsiCo delivered another quarter of mid-single-digit organic revenue growth, driven by our balanced food and beverage product portfolio and global geographic footprint,” said Indra Nooyi, chairman and chief executive officer. “We continue to invest in advertising and marketing, innovation and other marketplace initiatives to sustain our organic revenue growth, and we are driving a robust productivity agenda that serves as a funding source for these investments.

“Importantly, we maintained disciplined, balanced pricing that, together with our productivity initiatives, translated to healthy margin improvement. In the second quarter, we increased both gross margins and operating margins by more than 100 basis points.”

The Frito-Lay North America segment had an operating profit of $906 million, up 8% from $835 million during the same quarter of the previous year. The segment had revenue of $3,332 million, up 4% from $3,193 million.

Operating profit for the Quaker Foods North America segment was $133 million, down 14% from $154 million during the same quarter of the previous year. Revenue for the segment was $577 million, down 1% from $583 million.

Latin America Foods operating profit was $318 million in the second quarter of fiscal 2013, up 17% from $271 million a year ago. Net sales rose 9% to $2,116 million from $1,948 million.

For the six months ended June 15, the company saw income rise 18% to $3,085 million, or $1.97 per share, which compared with $2,615 million, or $1.65 per share, during the same period of the previous year.

Revenue for the period was $29,388 million, up 2% from $28,886 million.

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