PepsiCo profit, revenue beat estimates as higher pricing pays offPepsiCo Inc reported better-than-expected quarterly profit and sales and raised its full-year adjusted earnings forecast as higher prices helped drive revenue growth in its beverages business for just the second time in nearly four years.
By: Staff Report, Reuters
The company's shares rose 3 percent to $98.49 in premarket trading on Thursday.
PepsiCo, like other soft drink makers, has been battling falling soda sales in the United States, with customers turning to healthier drinks that use more natural ingredients.
However, revenue from the company's Americas beverages business, its largest, rose 1 percent to $5.34 billion in the second quarter, as its strategy of raising prices to offset the impact of a strong dollar paid off.
Organic volume sales in the region also rose 1 percent, the company said.
The company said on Wednesday that it would report results for its North America beverages business separately from the third quarter instead of clubbing it with Latin America beverage sales.
Frito-Lay snacks sales in North America, PepsiCo's second-largest business, grew 2 percent to $3.45 billion in the second quarter. The business sells snacks such as Doritos tortilla chips and Cheetos.
The company raised its forecast for 2015 adjusted earnings per share growth to 8 percent on a constant currency basis, or about $5 per share, from 7 percent.
Net income attributable to PepsiCo rose marginally to $1.98 billion, or $1.33 per share, in the second quarter ended June 13, from $1.98 billion, or $1.29 per share, a year earlier.
Excluding items, the company earned $1.32 per share.
Net revenue fell 5.7 percent to $15.92 billion as a stronger dollar continued to weigh on overseas sales.
Analysts on an average had expected earnings of $1.24 per share and revenue of $15.80 billion, according to Thomson Reuters I/B/E/S.
Up to Wednesday's close, the company's shares had risen 6.6 percent in the last 12 months.