PepsiCo reports Q1 net income increases 13%

by Staff
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PURCHASE, N.Y. — Net income of PepsiCo in the first quarter was $912 million, equal to 53c per share on the common stock, compared with $804 million, or 46c per share, in the same quarter in 2004, the company announced today. Sales were $6,585 million, up 7%. The profit surge was driven by a 20% jump in International operating earnings.

Net revenues increased 7%, with each of the company's operating divisions posting solid top line growth, company officials said.

PepsiCo International profits increased 20% as emerging markets continue strong growth, the officials said.

Snacks volume growth of 4% was driven by single-digit growth at Gamesa and Sabritas in Mexico, double-digit growth in Egypt and Turkey and strong double-digit growth in the four major emerging markets of India, China, Russia and Brazil. Those growth results were offset somewhat by volume declines at Walker's in the U.K.

The dissolution of the company's snack joint venture in South Korea and an acquisition in Romania had no net impact on the reported snack volume growth rate.

International beverages posted growth of 9%, driven by strong performance across the Middle East and double-digit growth in total for the major emerging markets, although gains were offset somewhat by a modest volume decline in Mexico. Carbonated soft drinks grew at a high single-digit rate, and non-carbonated beverage volume grew at a double-digit rate.

The grain-based foods divisions of PepsiCo also posted strong profit and sales growth in the first quarter ended March 19.

Operating profit of Frito-Lay North America was $539 million, up 6% from $510 million in the first quarter last year. Operating margins were hampered by increased fuel and energy costs in the quarter. Sales were $2,263 million, also up 6%.

Quaker Foods North America profits were $145 million, up 18% from $123 million. Sales were $417 million, up 10%. Operating profit growth was driven by the strong sales growth and the growth of higher margin products.

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