PepsiCo reports higher profit, affirms outlook
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NEW YORK (Reuters) - PepsiCo Inc said on Thursday quarterly profit rose 5 percent, as strong international results offset weakness in North America related to the weak economy.The maker of Pepsi-Cola, Gatorade sports drink and Lay's potato chips, which also affirmed its full-year outlook, reported first-quarter net income of $1.15 billion, or 70 cents per share, up from $1.10 billion, or 65 cents per share, a year earlier. Analysts on average were expecting 70 cents, according to Reuters Estimates.Net revenue rose 13 percent to $8.33 billion, including a 3 percentage-point benefit from foreign exchange rates.PepsiCo and other companies with large exposure to international markets are getting a boost this quarter as the weakness of the U.S. dollar versus many other currencies inflates the value of overseas sales when they are converted to U.S. dollars for inclusion in the company's income statement.Company-wide volume rose 4 percent, despite a 0.6 percent decline in the Americas beverage business. Volume rose 3 percent in the Americas foods business, 11 percent in the international foods business and 15 percent in the international drinks business.The company expects 2008 performance to be in line with its long-term targets, with volume rising 3 percent to 5 percent, net revenue growing at a high single-digit percentage rate and earnings per share of at least $3.72.Analysts on average were expecting earnings of $3.73 per share on revenue of $42.74 billion, according to Reuters Estimates.PepsiCo expects full-year worldwide commodity costs to rise 9 percent to 10 percent and its tax rate to be about 27.5 percent.PepsiCo shares fell nearly 1 percent in pre-market trade to $68.50. It closed on Wednesday at $69.19 on the New York Stock Exchange.(Reporting by Martinne Geller; Editing by Gerald E. McCormick and Derek Caney)
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