PepsiCo 3Q Net Rises 4.1% As Higher Prices Help Mitigate Costs |
| Wall Street Journal - Oct 12, 2011 |
PepsiCo Inc.'s (PEP) third-quarter earnings rose 4.1%, with the drink-and-snack giant growing sales volume, including in its largest beverage business, even as it implemented price increases to try to defray a 21% jump in costs.
"We were able to achieve pricing to partially offset commodity cost inflation and at the same time stimulate consumer demand for our products," said Chairman and Chief Executive Indra Nooyi. "The result in the quarter was well-balanced top-line and bottom-line growth."
Earnings and revenue both beat Wall Street estimates. The company also backed its full-year guidance for high-single digit earnings growth, though it now expects a smaller benefit from foreign exchange rates due to the stronger dollar, implying slightly better growth from its underlying business.
While Pepsi's Americas drinks business, its largest unit, posted slight volume growth, its soda business failed to dazzle. Volume growth was led by a mid-single-digit increase in non-carbonated beverages, including a 9% increase in Gatorade, implying a decline in sparkling beverages.
Pepsi is trying to restore some luster to its soda business, including launching new advertising behind its flagship Pepsi-Cola drink, which has dropped to the number three spot in the U.S. soda market behind Coca-Cola Co.'s (KO) regular Coke and Diet Coke. Pepsi recently began a long-hyped tie in with "The X Factor" television show in the U.S.
Read Full Article from Wall Street Journal
- Posted: 2011-10-12 10:49:53
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