PepsiCo earnings top Wall Street forecast

PURCHASE, N.Y., Wed Jul 25, 2012 – PepsiCo Inc. reported a higher-than-expected quarterly profit on Wednesday, helped by price increases, and stood by its full-year outlook.
That the maker of Diet Pepsi, Frito-Lay snacks and Tropicana orange juice did not cut its outlook was viewed as a sign of strength at a time when many consumer products companies are suffering from a weak global economy.
“In a consumer group seeing negative second-half revisions, we consider this positive,” said Stifel Nicolaus analyst Mark Swartzberg.
PepsiCo said second-quarter net income had fallen to $1.49 billion, or 94 cents per share, from $1.89 billion, or $1.17 per share, a year earlier.
Excluding items, earnings were $1.12 per share, topping the analysts’ average estimate of $1.09, according to Thomson Reuters I/B/E/S.
Revenue fell 2 percent to $16.5 billion, in line with Wall Street estimates.
The decline resulted in part from a loss of revenue in China and Mexico after the company sold the bottling operations in those countries to franchisees. The stronger U.S. dollar, which reduces the value of overseas revenue, also cut into sales.
Excluding those items, organic revenue rose 5 percent, with contributions of 1 percentage point from volume and 4 percentage points from price increases.
Volume rose 6 percent in the snack business and 1 percent for the beverage business. In the Americas, volume rose 5 percent in snacks and fell 1 percent in beverages. In Europe, volume rose 1 percent in snacks and fell 2 percent in beverages.
The company affirmed its 2012 outlook, which calls for earnings per share to fall 5 percent from the $4.40 it earned in 2011. It expects revenue to grow by a mid-single-digit percentage rate, excluding the reduction from refranchising its businesses in China and Mexico.