PepsiCo income down 20% in quarter

by Staff
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PURCHASE, N.Y. — Income for PepsiCo, Inc. during the first quarter was down 20% on rising costs despite a 27% increase in revenue.

For the quarter ended March 19, the company had income of $1,143 million, equal to 71c per share on the common stock, which compared with income of $1,430 million, or 89c per share, during the same quarter of the previous year. Revenue for the quarter was $11,937 million, up 27% from $9,368 million during the same quarter of the previous year.

Revenue was up on volume growth, effective net pricing, the impact of bottler acquisitions and the acquisition of Wimm-Bill-Dann.

“We are pleased with the broad-based volume and net revenue growth in the quarter,” said Indra Nooyi, chairman and chief executive officer. “Growth in emerging markets was strong, driving attractive gains in Eastern Europe, Asia and the Middle East. Importantly, we had strong volume growth in both our Frito-Lay snacks and North American beverage businesses, with each up 2% on an organic basis over the prior year. We continue to make investments in innovation, brand building and emerging markets growth, and our first-quarter results give us confidence that our investments are paying off. We are focused on managing our global portfolio to succeed in the marketplace and at the same time drive profitable growth and strong returns for our shareholders.”

The Frito-Lay North America segment had operating profit of $774 million, up 6% from $728 million during the same quarter of the previous year. Revenue for the quarter was $2,904 million, up 1.5% from $2,864 million during the same quarter of the previous year.

Quaker Foods North America had an operating profit of $214 million, up 9% from $195 million during the same quarter of the previous year. Revenue for the segment was $640 million, down 6% from $683 million during the same quarter of the previous year.

The PepsiCo Americas Beverages segment posted operating profit of $558 million, up sharply from $73 million during the same quarter of the previous year. The segment had revenue of $4,531 million, up 64% from $2,765 million during the same quarter of the previous year.

“Strong top-line performance in the first quarter translated to solid financial results,” said Hugh Johnston, chief financial officer. “As expected, we are experiencing a high level of input cost inflation, which we are addressing with productivity programs, prudent pricing actions and systematic hedging that give us good visibility into our cost outlook for the year. We are executing as planned and remain confident in our full-year outlook.”

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