PURCHASE, N.Y. — Strong growth in its Frito-Lay snacks division coupled with increases in international revenues led to a 16% gain in earnings at PepsiCo, Inc. in the first quarter ended March 24.
Net income in the first quarter was $1,096 million, equal to 65c per share on the common stock, which compared with $947 million, or 56c per share, in the first quarter of 2006. Revenue of $7,350 million was a 9% increase from $6,719 million in the previous year’s first quarter.
"We’re pleased with our performance for the first quarter of 2007," said Indra Nooyi, PepsiCo chief executive officer. "The business portfolio performed exceedingly well, with each of our operating divisions showing strong results.
"Our international business performed well on virtually every dimension. Volume gains in snacks and beverages were broad-based, operating margins expanded, and growth was balanced across developed and emerging markets."
The only unit of PepsiCo to sustain a decline in operating profit was PepsiCo Beverages North America, which eased to $425 million from $428 million. But sales in the division rose 5% to $2,086 million. The sales gain was driven in large part by price increases on Tropicana Pure Premium and carbonated soft drink concentrate, but also reflected favorable mix from growth of non-carbonated beverages, led by Aquafina, Propel, SoBe, Gatorade and Lipton ready-to-drink teas.
Frito-Lay North America (F.L.N.A.) had operating profit of $610 million, up 7% from $569 million in the previous year’s first quarter. Sales of $2,553 million marked a 7% increase from sales of $2,393 million in the previous year’s first quarter.
The company said the gain in sales reflected volume growth of 3.5%, positive net pricing and favorable mix. In addition, growth was led by double-digit gains in trademark Doritos, SunChips, trademark Tostitos, and multi-pack. Quaker-branded snacks also contributed. The growth partially was offset by a mid-single-digit decline in trademark Lay’s.
Sales of F.L.N.A. rose 6% in salty snacks, while macro snacks revenue climbed 13% during the quarter.
Quaker Foods North America, another PepsiCo subsidiary, posted operating profit of $156 million, up 3% from $151 million. Sales in the quarter were $463 million, up 5% from the same period a year ago, reflecting strong oatmeal sales.
The big gainer for PepsiCo during the quarter was its international unit, which posted operating profit of $372 million, up 29% from $288 million. Sales at PepsiCo International totaled $2,248 million during the first quarter, up 19% from the same quarter a year ago.
International snacks volume grew 13%, reflecting double-digit growth at Gamesa in Mexcico, while beverage volume rose 7%.
Looking ahead, PepsiCo said it expects full-year earnings per share of at least $3.30, with cash provided by operating activities expected to exceed $7 billion.