PepsiCo records flat second-quarter earnings

by Staff
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PURCHASE, N.Y. — Compared with the second quarter of fiscal 2008, PepsiCo, Inc.’s 2009 second-quarter results declined slightly. For the quarter ended June 13, the company posted net income of $1,660 million, equal to $1.06 per share on the common stock, down from $1,699 million, or $1.05 per share.

Sales for the quarter were $10,592 million. Sales during the second quarter of fiscal 2008 were $10,945 million.

"Our results this quarter reinforce the advantages of our balanced portfolio, as our food and international businesses delivered solid performance while we continued the transformation of our North American beverage business," said Indra Nooyi, chairman and chief executive officer.

The company’s Frito-Lay North America business recorded an operating profit of $783 million on sales of $3,138 million during the quarter. Both were increases compared with the second quarter of fiscal 2008 when the company had an operating profit of $735 million on sales of $2,950 million.

The company said volume growth was driven by the division’s core brands such as Lay’s and Doritos, supported in part by a "20% more" promotion on its take-home size, corn-based offerings. Dips and Multipacks, together with healthy adjacencies to the core portfolio such as TrueNorth nuts, Sabra dips, Spitz seeds and Stacy’s pita chips, also contributed to the growth in volume.

Both operating profit and sales for the company’s Americas Beverages business unit declined compared with the same period during fiscal 2008. Operating profit was $618 million in 2009 compared with $681 million during 2008. Sales were $2,618 million and $2,880 million, respectively. The overall results reflect the challenging underlying liquid refreshment beverage category dynamics, consumer shifts to lower-price options and an intensely competitive environment, according to the company.

For the first half of fiscal 2009, net income was $2,795 million, or $1.78 per share, compared with net income of $2,847 million, or $1.76 per share, during the same period of 2008. Sales were $18,885 million during the first half of 2009 compared with $19,278 million during the previous year.

PepsiCo reaffirmed its full-year 2009 guidance for both net revenue and earnings per share of mid- to high-single-digit constant currency growth over its 2008 earnings per share of $3.68.

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