PepsiCo reports higher profit despite economic pressures

PHOTO: PepsiCo reports higher profit despite economic pressures

PepsiCo Inc reported higher quarterly earnings on Wednesday and said it was on track to meet its financial goals for the year, despite a sluggish economy.

The maker of Pepsi-Cola, Frito-Lay snacks and Tropicana juice said net income was US$1.91 billion (S$2.38 billion), or $1.23 per share, in the third quarter, up less than 1 per cent from $1.90 billion, or $1.21 per share, a year earlier.

Excluding items, earnings were $1.24 per share. On that basis, analysts were expecting $1.17, according to Thomson Reuters I/B/E/S.

Shares of PepsiCo were up 1.1 per cent at $81.50 in trading before the market opened.

Speaking on Bloomberg Television on Tuesday morning, PepsiCo Chief Financial Officer Hugh Johnston said the company had delivered a "good quarter" and that its global beverage business was "largely in line with what the competition was doing."

"We think that's enough to satisfy the broader investor base," Johnston said, adding that PepsiCo had raised prices by about 3 per cent in the last quarter so that it could reinvest the money in its brands and innovation.

PepsiCo has been under pressure from activist shareholder Nelson Peltz since July, when he said publicly that the company should buy Oreo cookie maker Mondelez International and split off its soft-drink business.

Net revenue rose 1.5 per cent to $16.91 billion.