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PepsiCo raises profit forecast as North America snack sales rise

Published 23/07/2014, 15:04
PepsiCo raises profit forecast as North America snack sales rise
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(Reuters) - PepsiCo Inc (N:PEP) reported a higher-than-expected quarterly profit and raised its full-year adjusted earnings forecast, helped by strong sales of snacks such as Lays and Doritos chips in North America.

Shares of the maker of Pepsi-Cola, Frito-Lay snacks and Tropicana juice rose 2.3 percent to $91.25 (53.56 pounds) before the bell.

The company said organic revenue grew 5 percent in its global snacks business, partly due to price hikes.

Organic revenue rose 2 percent in beverages business.

Snack volumes in North America grew 2.5 percent, but soda volumes fell 2 percent, as health-conscious consumers favoured juices and health drinks.

Rival Coca-Cola Co (N:KO) reported on Tuesday flat soda volumes in North America for the second straight quarter.

PepsiCo raised its full-year earnings per share growth forecast to 8 percent from 7 percent. This translates to about $4.71 per share, above the average analyst estimate of $4.54, according to Thomson Reuters I/B/E/S.

PepsiCo's net income fell 2 percent to $1.98 billion (1.16 billion pounds), or $1.29 per share, in the 12 weeks ended June 14 from $2.01 billion, or $1.28 per share, a year earlier.

Excluding items, the company earned $1.32 per share.

© Reuters. Cases of Pepsi are displayed for sale in Carlsbad

Revenue rose 0.5 percent to $16.89 billion.

Analysts on average had expected PepsiCo to earn $1.23 per share on revenue of $16.81 billion.

The company's shares have risen 7.5 percent this year to Tuesday's close.

(Reporting by Anjali Athavaley in New York and Siddharth Cavale in Bangalore; Editing by Kirti Pandey)

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